Lehman, Deutsche to invest $500 million in Unitech's SPV
Private equity players, Lehman Brothers Holdings Inc. and Deutsche Bank are set to make a combined investment of $500 million in a special purpose vehicle (SPV) floated by India's second-biggest real estate developer Unitech Ltd.,
HDFC Bank to acquire Centurion Bank in $2.4 billion share-swap dealThe banks are in advanced talks with Unitech Ltd., to pick up a minority stake in the SPV formed to execute two commercial projects in Mumbai.
The two projects, located in Santa Cruz, are likely to have a combined developable office space of 2 million sq. ft. The deal is likely to be closed in the next three weeks though Unitech Ltd. has not commented on the issue so far.
The Santa Cruz project may be one of the first to be completed by Unitech Ltd., in Mumbai. The company has largely been an NCR player, with a good 70 percent of its revenue coming from New Delhi and surrounding towns. Unitech Ltd., now wants to foray into other parts of the country with emphasis on Mumbai.
Unitech Ltd. seeks to increase its potential earnings from projects in Mumbai.
"Unitech has a land bank of 350 acres in Mumbai. The company is aiming to generate more revenues from Mumbai than NCR in the next two years," said a company representative, adding further that a higher return on real estate in the financial capital is the most likely reason for this move.
Unitech Ltd. had announced its entry in the Mumbai market last year with a 97-acre commercial project in Bandra-Kurla Complex.
With this injection of fresh funds, Unitech Ltd., can take a breath of relief since it recently had to put its $1 billion qualified institutional placement (QIP) and the listing of its Singapore Real Estate Investment Trust (SREIT), on hold due to poor market sentiment.
The likely deal between Unitech Ltd., and Lehman and Deutsche also brings to light that although poor market conditions might have slowed down private equity deals, big money is still being quoted for certain opportunities in India.
The Gurgaon-based Unitech Ltd. has been playing a major role in the development of India's real estate industry since 1974. From Homes to Offices to shopping malls to hotels & clubs, Unitech has widened their field of work to power plants, transmission lines, classrooms, roads and theme parks in India through the recent projects.
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