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Kotak Mahindra is raising a fresh real estate fund of $350 million from overseas investors. The fund will be registered in Mauritius, reports Business Standard. "We have already started the process. We have a target to reach over $1 billion (all Kotak funds put together) by this year-end," S Srniwasan, chief executive officer, Kotak Realty Fund, has been quoted as saying by BS.

Kotak has just raised $400 million for its second real estate fund, which will make $20-25 million investment per deal in distressed assets, joint venture projects, pre-IPO investments and property development. It can make investments in both FDI and non-FDI-compliant opportunities.

Kotak Private Equity also has an "India Growth Fund" of $160 million, besides its first real estate fund of $100 million.

Swiss financial services company Credit Suisse’s real estate fund is picking up 10-15% stake for $55 million (Rs 220 crore) in the Park Hotels chain in a structured deal. The deal puts the valuation of the closely-held Apeejay Surrendra Hotels at Rs 1,500-2,200 crore, placing it among the top five hotel companies in the country, reports Business Standard. Credit Suisse is likely to have a representative on the board of the hotel company and help it chalk out its long-term growth strategy, the business daily says. ICICI Securities is the advisor to Credit Suisse for this deal.

According to Hindustan Times, Park Hotels plans to build eight new hotels and create a pan-India presence with the infusion of capital. The expansion, to be the largest for Park Hotels, is aimed at catapulting the company into the top five in the country.

Credit Suisse was reported in January to be raising close to $1 billion (Rs 4,000 crore) to invest in the real estate sector in the country. This is Credit Suisse’s second investment in the real estate sector, the first being its acquisition of 75 per cent in a Rs 300-crore infotech park-cum-five-star-hotel project of developer Vascon Engineers, based in Pune. Industry experts say the foreign company could invest $1 billion in the next two years in the Indian real estate segment.

Related:

Credit Suisse Receives Merchant Banking Licence In India

Hotels Contemplating IPO Or Private Placement

The Euronext-listed real estate investment firm Yatra Capital has announced that it has picked up a 24 per cent stake in a joint venture to develop a 1.5 million sq feet shopping centre, Market City, in Pune in Maharashtra. Yatra will invest €17.24 million ($23.5 million) in equity for a 24 per cent holding in the company promoted by Ashok Ruia Enterprises Pvt Ltd (AREPL). This is the fourth investment in India by Yatra, and the second in a JV with AREPL.

Last week, Yatra announced that it invested €3.73 million ($5 million) in the Mumbai-based Phoenix Mills Ltd, another JV of AREPL and publicly listed company on Indian stock exchanges, to pick up a 0.88 per cent stake. Yatra acquired 126,756 shares of Phoenix Mills for €29.27 (Rs 1600) a share, at a discount to the market price of €5.48 (Rs 300) a share.

Yatra is betting on Pune now. The Market City development will be amongst the largest shopping centres in Pune, according to a release, which with a population of 4.5 million, is over four times larger than Birmingham, the UK‟s second largest city.

Phoenix's "Market City‟ concept envisages retail-led large scale developments typically located in city centre locations. Phoenix plans seven such market cities of a total size of 15 million sq ft across the country.

Yatra Capital, an India-focussed real estate investment company, raised €100 million from the Euronext exchange in Amsterdam in December last year. Founded by ex-HSBC executive Ajoy Veer Kapoor and Rohin Shah, and backed by investors like Morley Fund Management, Fortis Investments and Standard Life, Yatra was the first Indian real estate company to list in Euronext stock exchange of Amsterdam. The fund's focus is to invest in tier II and tier III cities of India, which will invest through Saffron Capital Advisors, an asset management advisory firm.

(Big Bazaar in Mumbai's Phoenix Mills; picture found on Flickr.com)

Related:

Yatra Capital Acquires Real Estate Fund Eredene; Invests In Phoenix Mills

Yatra Capital Raises €105 Million From Euroenext; To Focus On Tier II & III Cities

DLF Group's property fund, DLF Assets Pvt Ltd, has raised $600 million from two global investors. DLF Assets has received $200 million from a fund sponsored by Lehman Brothers and $400 million from another global investment firm D E Shaw. Both Investors would get representation on the board of directors of DLF Assets, which has been set up to buy properties developed by parent company DLF Ltd and others.

However, this money is "barely sufficient" to fund one quarter's growth, according to Ramesh Sanka, CFO of the group company DLF Ltd, as reported by Bloomberg. So the group plans to raise $1 billion more by end of the year to bankroll DLF Assets' property buying plans. After that, DLF Assets plans to list in the capital markets in the next 18 months to two years.

DLF Assets also announced that it has acquired 5.5 million square feet of property from the parent DLF Ltd. and plans to buy additional 7 million square feet this year. It will obtain 10 million square feet each year, DLF CFO said. DLF Assets also plans to become a Real Estate Investment Trust once they are allowed by the government. The government may allow REITS this year.

The Euronext-listed Indian real estate fund Yatra Capital Ltd has acquired another India-focused property fund Eredene Capital Mauritius for €18.07 million (Rs 99.39 crore). Yatra has made the acquisition through its subsidiary K2 Property Ltd.

Eredene was one of the first India-focused real estate funds to list on London’s Alternate Investment Market. In April 2006, it had raised a $100 million from AIM. Yatra Capital, an India-focussed real estate investment company, raised €100 million from the Euronext exchange in Amsterdam in December last year. Founded by ex-HSBC executive Ajoy Veer Kapoor and Rohin Shah, and backed by investors like Morley Fund Management, Fortis Investments and Standard Life, Yatra was the first Indian real estate company to list in Euronext. The fund's focus is to invest in tier II and tier III cities of India, which will invest through Saffron Capital Advisors, an asset management advisory firm.

By acquiring Eredene, Yatra has acquired the following: 1) A 50% stake in an 800,000 square feet shopping mall in Nashik, Maharashtra. 2) A 30% stake for a combined retail, office, hotel and residential development on a 19.5 acre prime site on the outskirts of Indore, Madhya Pradesh 3)A 35% stake in an integrated residential township on a 100 acre site also located on the outskirts of Indore and 4) A conditional term sheet to invest in the development of a five star hotel and service apartments in Bangalore with a 50% stake.

Yatra also announced in a release that it has already invested €51.58 million in Indian real estate projects from its €100 million fund.

Acquires Stake In Phoenix Mills

On June 25, Yatra announced that it has invested €3.73 million in The Phoenix Mills Limited, a real estate development company listed on Indian stock exchanges. Yatra has acquired 126,756 shares for €29.27 (Rs 1600) per share, at a discount to the market price of €5.48 (Rs 300) per share. This gives a 0.88 per cent stake in Phoenix Mills, which recently merged with Ashok Ruia Enterprises Pvt Ltd. The company is currently involved in seven retail led developments of 15 million square feet

Besides Yatra, other investors like Deutsche Bank and Americorp have also invested in Phoenix Mills. But it's not clear how much is the total investment in Phoenix Mills. An NDTV story says the company is divesting a total of 9.5 per cent stake to raise Rs 650 crore from a group of investors like Trinity Capital, besides Deustche Bank, HSBC, DBS, AmeriCorp, GLG Capital and Yatra.

For more, go to Yatra press releases (PDF) on Eredene acquisition and Phoenix Mills.

Other coverage at Mint and NDTV Profit.

Related:

Yatra Capital Raises €105 Million From Euroenext; To Focus On Tier II & III Cities

Government of Singapore Investment Corporation (GIC) is forming two joint ventures for hospitality and IT parks with Delhi-based real estate company and tile maker Anant Raj Industries. GIC will hold 49.9 per cent stake in both the ventures, while Anant Raj will hold majority stake, reports The Economic Times.

GIC had last month invested about $105.5 million in Anant Raj to pick up 8.5 per cent stake. The others like Morgan Stanley Dean Witter and George Soros Fund had also invested a combined $61.5 million in the company. GIC is now looking to make further investments into the new joint ventures of Anant Raj which will build hotels and IT parks. ET report says that the hotels JV could be having an equity component anywhere above $150 million depending on how many hotels they want to build. The JV is expected to kick of in the next two months. The infrastructure and IT parks JV may be floated within the next five to six months.

New Lease Of Life

Anant Raj, promoted by Delhi-based business man Ashok Sarin, was incorporated in 1985. It's best known for its Romano Tiles, but went through a rough patch in 1999 when it was declared a sick unit. The company was referred to BIFR (the equivalent of filing for bankruptcy in the US), and IDBI was appointed as the operating agency to devise a rehabilitation scheme. The package was implemented in October 2005. The company has ever since acquired a new lease of life, as it went in for a forward integration into real estate development, along with its original business of basic tile manufacturing business.

Last month, Anant Raj raked in Rs 683 crore ($167 million) by selling 13.5 per cent stake to GIC, George Soros's hedge fund Quantum and Morgan Stanley Dean Witter. GIC picked up 3.51 million shares (8.5 per cent stake) for about Rs 432 crore ($104.5 million). Morgan Stanley Dean Witter was allotted 1.36 million shares (3.33 per cent) for Rs 167.93 crore ($41 million), while Quantum bought 0.68 million shares (1.6 per cent) for Rs 83.6 crore ($20.4 million). All the investors bought the shares at Rs 1,229.51 a share on preferential basis. [See the BSE announcement]

Finally, after all the hard sell, the DLF IPO was oversubscribed a modest 3.45 times. The merchant bankers and distributors were working overtime on the IPO. The IPO forms were even distributed at door steps of homes, but retail subscription was a just about 0.82 times. But the qualified institutional buyer's category was the saving grace with 5.23 times subscription. FIIs helped DLF and the merchant bankers save their face.

The 175 million share issue received 603.73 million bids, of which 45.11 million bids at cut off price, says a report in Moneycontrol. The reserved portion of HNIs subscribed 0.53 times while retail received 0.82 times subscription. The real estate giant came with an IPO of 175,000,000 equity shares of Rs 2 each through a 100 per cent book building process. The shates were priced at Rs 500-550 a share.

The issue would constitute 10.27 per cent of the fully diluted post-issue capital of the company., and it was expected to raise about Rs 9,620 crore through the IPO.

Kotak Mahindra Capital and DSP Merrill Lynch are the global coordinators and book running lead managers. Lehman Brothers Securities is the senior book running lead manger. Citigroup Global Markets, Deutsche Equities, ICICI Securities Primary Dealership, and UBS Securities are the book running lead managers to the issue. SBI Capital Market is the co-book running lead manager and Karvy Computershare is the registrar to the issue.

Singapore-based leading business space solutions company Ascendas has launched a S$500 million ($325 million) fund to invest in Indian business and IT parks. The fund christened Ascendas India Development Trust (AIDT) has investors like Bahrain-based asset manager Arcapita, and Holland's ING Private Banking. AIDT will invest in two IT business parks, in Pune and Nagpur, in Maharashtra, to start with.

The creation of AIDT follows the S$250 million equity Ascendas India IT Parks Trust launched in June 2005. AIDT has a target asset size of S$1 billion ($650 million), and plans to invest in integrated development real estate projects in India, including complementary land for industrial, commercial, residential and retail use.

Ascendas will specifically develop the business space within these projects, while participation in residential, commercial, retail, hotels, recreation and other supporting uses will be through and with other parties.

The fund is constituted in Singapore as a private trust and is denominated in Singapore dollars. It has has a term of eight years, which can be extended by two years, and will be managed by Ascendas. Jonathan Yap has been appointed as the CEO of India Funds, and will be based in Singapore. He will manage Ascendas’ India-focused funds including the Ascendas India IT Parks Trust and other India funds that are in the pipeline. Lim Sin Tiow is the new CEO of Ascendas India.

Ascendas’ India portfolio comprises seven IT parks spread across five key cities – Bangalore, Chennai, Hyderabad, Pune and Nagpur. Ascendas’ first private Indian real estate fund was the Ascendas India IT Parks Trust, seeded by two mature IT park assets, ie. International Tech Park Bangalore (ITPB) and The V in Hyderabad. The Trust later acquired CyberPearl in Hyderabad and partial share in International Tech Park Chennai.

Property consultancy Trammell Crow Meghraj (TCM) has found a suitor. Jones Lang LaSalle Inc, the world’s leading real estate services and money management firm, has merged the operations of TCM to itself. The merger was announced at a press conference in Delhi this afternoon.

The merger enables Jones Lang LaSalle to add immediate scale in India, a happening real estate market. For TCM, Jones Lang LaSalle’s global resources will enhance their ability to serve clients’ global needs. They will become the largest property consultant with aout 30 per cent market share in Indian real estate market.

Anuj Puri, MD of TCM, will become the Chairman and Country Head of Jones Lang LaSalle Meghraj. Vincent Lottefier, who was previously Jones Lang LaSalle’s Country Head for India, has been appointed as Chief Executive Officer, India. Two other key senior executives in the new entity are Santhosh Kumar (TCM) and Gagan Singh (Jones Lang LaSalle), who will both assume the roles of Deputy CEOs.

Jones Lang LaSalle Meghraj will have approximately 2,800 employees in India, with offices in ten cities. The combined firm, which will have 44 million square feet under management across India, will have its India head office in Delhi. The company expects $100 million in revenue by 2009, and they plan to introduce additional service lines like a full service hotel division, corporate capital markets, debt and derivatives, asset management and specialist mall management.

Related:

Trammell Crow Meghraj In Merger Talks With Global Players

Real estate consultant Trammell Crow Meghraj (TCM) may go in for a merger with international players. The company is in talks with two global players for a possible merger or an alliance to expand its presence in India, reports PTI.

Trammell Crow entered India in late 2005 by acquiring the 30 per cent stake owned by Chesterton in Chesterton Meghraj. Last year, CB Richard Ellis acquired Trammell Crow in a global deal worth $2.2 billion. This meant CBRE owned Trammell's 30 per cent stake in its Indian joint venture.

Interestingly, there is unlikely to be a merger between TCM and CBRE, as the latter is reportedly not interested in merging with TCM. So TCM is in talks with the US-based Jones Lang LaSalle and UK-based Savills for a ptential merger or partnership for India, the reports says.

TCM, which has 10 offices and 1,300 employees in India, has some 15 per cent market share. But the company is looking at building a "prominent position" by building clientele from the international markets, according to Anuj Puri, TCM's Managing Director.