Lehman Brothers picks up 50 percent stake in Unitech's Mumbai office space project for $175 million

The $4 billion global private equity fund managed by Lehman Brothers is also expected to invest another $525 million in three different projects undertaken by Unitech

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The first phase of the project envisages development of 1 million square feet (sq. ft.) office space near the commercial hub of Bandra-Kurla complex in central Mumbai.

According to sources close to the deal, the development of the property, which has been undertaken by Unitech along with a local partner, will be complete in 2-3 years and will be leased out. The property will also be put in the hands of a trust so that the investors have no difficulty in exiting from the venture, the sources said.

Lehman Brothers Real Estate Partners will also contribute 50 percent of the construction costs with a collective similar contribution from Unitech and its local Mumbai partner, the sources added.

The development of the office space is part of a bigger development project that Unitech has taken up, which includes developing 18 million sq. ft. of space, including residential homes, shopping malls and hotels, at an estimated cost of $6.2 billion.

"Unitech and Lehman Brothers intend to expand the relationship by considering future investments in subsequent phases of this project, as well as in additional projects," Unitech said in the statement.

According to sources, the $4 billion global private equity fund managed by Lehman Brothers is also expected to invest another $525 million in three different projects undertaken by Unitech.

Lehman may pick up similar stakes in three projects - two projects of 1 million sq. ft. each in the Santacruz area and one project of 1 million sq. ft. office space in Worli, the sources said.

This is not the first time a foreign company has shown interest in India's realty market or has bought stake in a real estate project from an Indian company.

Earlier, in April, rival Parsvnath Developers Ltd sold 30 percent stake in a Mumbai project to two foreign funds for about $44.3 million.

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