Peninsula Land Ltd, a part of the Ashok Piramal Group, and Canada-based Brookfield Asset Management have announced a 50:50 joint venture to launch a domestic real estate fund early next year, the company has disclosed in a statement to the Bombay Stock Exchange today.
However, the target corpus of the proposed real estate fund was not disclosed.
Incorporated in 1997, Peninsula Land operates as a real estate development and management company in India. It has developed approximately 3 million sq. ft. of real estate while another 20 million sq. ft. of space is in various stages of planning and development, according to the company website. In addition, Peninsula offers facility management and investment advisory services, and also manages the Rs 180 crore Peninsula Realty Fund. The company, formerly known as Morarjee Realties Ltd, changed its name to Peninsula Land Ltd in April 2006.
The Ashok Piramal Group company has already invested into five projects and with a tie-up with Brookfield, it will be able to tap capital from overseas investors.
Under the deal, both companies will have an equal stake, and will jointly evaluate and manage investments while targeting the development of residential and commercial assets – primarily in tier I cities in India.
On the Bombay Stock Exchange, shares of Peninsula Land closed at Rs 30.60 a piece, down 2.93 per cent from the previous close.
In March this year, Kotak Mahindra Group tied up with Brookfield Asset Management to raise $300 million to invest in infrastructure projects in India. The funds will be invested in infrastructure holding companies, with focus on such areas as power generation & transmission, transportation including roads, ports and airports, and other infrastructure projects related to water and gas.
Toronto-based Brookfield Asset Management Inc. (formerly Brascan Corp) is a publicly owned asset management holding company with approximately $50 billion in assets under management. The company, through its funds and private capital business, invests in specialty funds including private equity and makes direct investments in real estate, energy, and resource assets. The company has offices across North and South America, Europe, Asia and Australia.
Although the private equity action in Indian real estate sector has been muted, there have been a few large deals this year, besides a string of small and mid-sized deals across income-generating developments.
In February 2011, Ascendas India Trust entered a deal to acquire a portfolio of five buildings in Phoenix Infocity Pvt Ltd’s SEZ for Rs 855 crore. Kotak Realty Fund sold Peepul Tree Properties (an IT park in Goregaon) to Tata Realty and Infrastructure Ltd and Tata Realty Initiatives Fund 1 for Rs 525 crore.
A few weeks ago, Pragnya Fund, a real estate-focused private equity fund, invested around $5 million (Rs 26 crore) in Hyderabad-based Vision Heights Ltd to develop a 50 acre township in Rajahmundry, Andhra Pradesh.
In October this year, Ambuja Realty acquired the RMZ block of Ecospace Business Park in New Town (Rajarhat), Kolkata, for an undisclosed sum. Also in September, Chennai-based Kalpathi Group, with business interests in private equity and entertainment, acquired the IT park Rantech Towers for around Rs 50 crore.
Even as the deal flow in realty market has not been very active, other financial groups are looking to tap into the opportunity for the future. Recently, ArthVeda Fund Management, a unit of Dewan Housing Finance Corp, has said that it plans to raise Rs 200 crore to invest in greenfield real estate projects.