Friday, March 9, 2007

Shapoorji Pallonji to raise $400 mn in private equity for real estate ventures

The 140-year-old construction firm, the Shapoorji Pallonji Group has been bitten by the private equity bug. It is raising around $400 mn from private equity investors to fund its real estate ventures. Three government-owned PE funds, Government of Singapore Investment Corporation (GIC), Dubai Capital and Abu Dhabi Investment Authority (ADIA), will pick up 30-40% equity in each project. The group is rolling out at least half-a-dozen projects in various cities with a total project cost of $1-1.2 bn.

Shapoorji Pallonji has a land bank of 2000 acres of prime land in cities like Mumbai, Pune, Chennai, Kolkata, Gurgaon, Nagpur and Mysore. It is currently developing around 550 acres (around 50 mn sq. ft.) of residential and commercial space. The projects include IT parks hotels, shopping malls and residential properties. All these projects are FDI (foreign direct investment)-compliant projects, and are located at prime areas, which will attract substantial premium. Each project is being developed by a different special purpose vehicle (SPV), and equity by SP group is expected to be rooted through one company.

Read The Economic Times article for more.

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