Deutsche Bank’s real estate arm is in advanced stages of talks with real estate major Emaar-MGF to invest around $200 mn in the company. If the transaction goes through, it could possibly be the biggest deal in the real estate sector in India. As of now, the largest private equity transaction in the realty space has been Morgan Stanley Real Estate Fund’s $125 mn investment in Mumbai-based Oberoi Constructions (See Related Post).
Deutsche Bank’s investment will be done through its New York-based real estate arm RREEF. RREEF is one of the biggest real estate investors in the world with over $65 bn in assets under management. It currently has seven separate funds around the world which make investments in real estate and infrastructure. It provides services in fund management, investment management, asset management, property management, leasing, research, construction and development.
The stake Emaar-MGF will dilute is not known as the transaction is expected to be a quasi-equity deal. RREEF will hold convertible debentures in the company. Last year, Citigroup and New York Life Insurance had picked around 2% equity in Emaar-MGF Land for a consideration of $100 mn. Evolvence India Fund had recently invested $41 mn in Emaar-MGF.
Emaar-MGF is a joint venture between the Dubai-based real estate company Emaar Group and India-based MGF Developments. It plans to hit the capital market sometime in the third quarter of 2007. It is expected that the JV will dilute about 5-10% of its equity in the IPO. On the hospitality front, Emaar-MGF recently entered a 50:50 JV with French hospitality chain Accor. The JV aims to build and operate a chain of 100 budget hotels with an investment of $300 mn. Of this, the first 20 are likely to come up on Emaar-MGF’s existing land bank.
Read The Economic Times article.
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