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 Indian property fund Indiareit Fund Advisors, backed by UK private equity firm 3i Group Plc and controlled by industrialist Ajay Piramal, is in talks to sell stake in a special economic zone (SEZ) in Pune for about 5 billion rupees, said two sources with direct knowledge of the matter.

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The negotiations are progressing and a transaction agreement could be signed in a couple of months, said the sources, declininig to be identified as they are not authorised to speak to the media.

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The SEZ, Blue Ridge at Hinjewadi in Pune, is being developed by Paranjape Schemes (Construction). Indiareit has invested about 2.5 billion rupees in phases between 2006 and 2008, said one of the sources.

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The SEZ comprises a total of 9 million sq ft, of which 6 million is residential and 3 million commercial.     When contacted, Managing Director and Chief Executive of Indiareit, Ramesh T. Jogani declined to comment.Indiareit has about 40-billion-rupee assets under management, mainly in teir-I cities such as Mumbai, New Delhi, Bangalore, Pune and Chennai.

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Earlier this month, Piramal Healthcare had said it would acquire PE funds Indiareit Fund Advisors and Indiareit Investment Management Company, both controlled by Ajay Piramal, for 2.25 billion rupees. Piramal, who also controls Piramal Glass and Piramal Life Sciences , was in the news last year for selling Piramal Healthcare's domestic formulations business to Abbott Laboratories for $3.72 billion. In March, Kotak Realty Fund, the real estate investment arm of Kotak Mahindra Bank sold one of its property assets - Peepul Tree Properties Pvt Ltd - to Tata Realty Fund for 5.25 billion rupees ($117 million). 

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