Global investor Lehman Brothers has picked up a 40 per cent stake in the upcoming IT park project of property developer Peninsula Land in Hyderabad.
Lehman is expected to pump nearly Rs 50 crore (Rs 500 million) into the project. PLL is expected to hold the remaining 60 per cent.
The initial cost of the project, including land, is Rs 125 crore (Rs 1.25 billion) and the development cost is nearly Rs 1,400 crore (Rs 14 billion). The company is planning to fund the project through debt and draw more funds from Lehman if required, sources said.
Recently, PLL and Lehman tied up to invest in the realty projects of Peninsula. In the Rs 700-crore (Rs 7 billion) joint venture, Lehman invested Rs 500 crore (Rs 5 billion) and held a 75 per cent stake, while PLL subscribed to the remaining equity at an investment of Rs 200 crore (Rs 2 billion). The Hyderabad deal was the first such investment from Lehman, sources said.
PLL is buidling a 7 million sq ft IT park on the Hyderabad property. PLL, the realty arm of the Ashok Piramal Group, recently bought a 30-acre land from Tata group company Rallis India for nearly Rs 90 crore (Rs 900 million), making an entry into southern markets.
"The company has applied for permission and the project is expected to start by the end of the year and finish in the next four to five years.
The company is expected either to sell the space or lease it according to market conditions,'' sources said.
Lehman is also expected to invest in the forthcoming projects of PLL in Mumbai, Nashik, Pune and Nagpur, among others. The Lehman-PLL tie-up closely follows the floating of realty funds by Peninsula.
Peninsula Realty Fund has floated two funds -- Indigo, a Rs 250-crore (Rs 2.5 billion) domestic fund, and Rs 1,400-crore (Rs 14-billion) Paramount offshore fund. Both the funds are expected to close in a couple of months.
PLL has raised a series of funds for its development works. It raised nearly Rs 525 crore (Rs 5.25 billion) through qualified institutional placement with financial institutions last year and sold 5.75 lakh sq ft of office space to Alok Infrastructure for Rs 1,100 crore (Rs 11 billion) and sold another property in Kurla to the Essar group for Rs 1,200 crore (Rs 12 billion).
In recent months, investment and private equity major Lehman Brothers has increased its exposure in the Indian real estate. It invested $200 million in K P Singh's DLF Assets and nearly $100 million with Kishore Biyani-led Future Capital to set up five-star hotels in the country.
PLL is developing nearly 4.5 million sq ft of real estate, including residential, commercial, IT parks and special economic zones across the country.
