Bangalore realty sector to see Rs 2000 crore PE investment

Private equity funds have continued to flow aggressively into Bangalore-based real estate developers, committing at least half a billion US dollars to four realty players.

Companies like Brigade Group, Shriram Properties, Confident Group and Skyline Builders are in the final stages of completing the paper work of tying up these investments. While Brigade is raising Rs 500 crore, Shriram is raising Rs 350 crore, and Confident and Skyline will be raising at least Rs 300 crore each. In addition to this, Umiya Holdings and Featherlite are also understood to be in active discussion with various PE funds for investments.

"Most of these investments are project-specific and are not at the enterprise level. Extensive due diligence was carried out on these commercial and residential properties before these funds were committed," an industry analyst said.

According to industry sources, funds like JP Morgan Asset Management, Sun Apollo, Blackstone and Morgan Stanley are active in the real estate market.

Venture Intelligence data indicates that of the $3 billion India-specific PE funds raised during the first six months of 2007, around $2.5 billion were for realty deals.

"Sun Apollo, the joint venture between US-based Apollo and Khemka-controlled Sun Group, is the most aggressive of the lot as it has raised around $630 million for India-focused realty deals," said a spokesperson for Venture Intelligence. JP Morgan, on the other hand, has raised $360 million.

Industry sources further indicate that Goldman Sachs is also stepping on the gas and understood to be closing at least two deals with Century and Confident Group.

"There are also some indications that there might be a second round of investment in the Mantri Group, which last year raised around Rs 350 crore from Morgan Stanley," the analyst said adding that Morgan might once again look at investing in this round.