Blackstone arm buys Synergy stake for Rs 72 cr

Blackstone Real Estate Partners, the real estate arm of Blackstone group, has taken a minority stake in Synergy Property Development Services by investing $18 million (Rs 72 crore).Blackstone recently closed Blackstone Real Estate Partners VI with capital commitments worth $10.9 billion, creating the largest ever real estate opportunity fund.

Synergy specializes in architectural design and fitouts, complete project management and turnkey contracts. The company's forte is in managing the entire process from start to finish and ensuring timely project delivery.

Synergy, which is based out of Bangalore, has delivered real estate worth more than 20 million square feet and currently manages over 100 million square feet across various asset classes including office, retail, residential, hotels and hospitals. The company is also planning to expand into infrastructure projects such as airports.

Read more in The Business Standard article

SBI, Macquarie line up $1-bn fund for core play

After foreign institutions and private sector banks, it is now the turn of public sector banks to set up infrastructure funds. State Bank of India, the country’s largest bank, along with Macquarie Capital Group, on Wednesday announced its intention to raise a new $2-billion infrastructure fund.

SBI and Macquarie Capital will hold 45% each in the proposed fund management company, while the International Finance Corporation (IFC) will hold the remaining 10%. Macquarie, SBI and IFC together plan to contribute a total of $450 million in anchor investments to start the fund, which will raise further capital from both domestic and international institutional investors. The fund is scheduled to be launched by the end of the second quarter of 2008.

The fund intends to provide equity and equity-like capital for investments in traditional infrastructure such as roads, ports, airports and power.This is the first private equity fund launched by SBI, and it plans to have different tie-up for other sectors.SBI chairman OP Bhatt will be the chairman of the company, while CEO and MD will be appointed by Macquarie Capital.

Unlike other funds, this new fund is unlikely to go in for a minority stake of 5%. With the backing of Macquarie, which is known for its infrastructure powers, the fund would look for larger equity play and also an influence over the assets.It will also look at investment opportunities in infrastructure-related assets and businesses.

Read more in The Economic Times article.

Vatika sells 10% to 3 PE funds

Vatika Group, a Delhi-based realty firm, has divested 10.75 per cent for raising $250 million (Rs 1,000 crore) as private equity investments from Wachovia Bank, Baer Capital and Goldman Sachs. The deal estimates the valuation of the privately held Vatika at around Rs 9,302 crore.This is the first private equity investment in Vatika, which is planning its maiden public issue in 2009.

Vatika’s valuation at Rs 9,302 crore is higher than the market capitalisation of some listed bigwigs such as Bangalore-based Sobha Developers (Rs 6,269 crore) and Purvankara (8,284 crore); its Delhi peers such as Parsvnath Developers (Rs 6,398 crore), Omaxe (Rs 7,111 crore) and AnantRaj (Rs 8,557 crore) and the Mumbai-headquartered companies such as Akruti City (Rs 7,705 crore).

Read more in The Business Standard article.

Deutsche likely to infuse $125 mn into Golden Gate

European financial powerhouse Deutsche Bank (DB) is set to invest $125 million in Bangalore-based Golden Gate Properties (GGPL) for a 15-20% stake.

It is believed that Deutsche Bank has emerged as the front-runner in a fund-raising process kicked off by the southern realty player about a year ago. Sources said the initial agreement has been inked even though the deal is not yet closed. Other players in the fray included Credit Suisse and ABN Amro. The transaction, according to sources, is likely to value GGPL at around Rs 2,700-3,000 crore.

Earlier, DB invested around Rs 1,700 crore for around 25% stake in special purpose vehicle (SPV) floated by Mumbai-based Lodha group. This SPV proposes to set up three FDI-compliant real estate projects over 70 acres in Thane and Dahisar. Notwithstanding the sub-prime crisis in the US, DB and its global peers like JP Morgan, Credit Suisse and ABN Amro are on the prowl for investments in India’s real estate sector.In fact, sectoral analysts say some of these funds are hedging their portfolio on emerging markets like India.

Read more in The Economic Times article.