Goldman will hold 74%, leaving Bangalore-based Nitesh Estates with 26% in the JV entity with plans to acquire rent-yielding office parks, shopping malls and luxury hotels.
MUMBAI: Wall Street bellwether Goldman Sachs is set to invest $300 million (Rs 1,850 crore) in a joint venture company floated by listed developer Nitesh Estates, which will own and operate commercial real estate assets in India, people directly aware of the matter said.
Goldman will hold 74%, leaving Bangalore-based Nitesh Estates with 26% in the JV entity with plans to acquire rent-yielding office parks, shopping malls and luxury hotels, sources added. The impending deal is a proprietary investment from the Goldman Sachs balance sheet which has assets estimated at over $900 billion.
It joins a growing list of marquee global investors like Blackstone, Brookfield Asset Management, Qatar Investment Authority and GIC of Singapore which have been buying into India's over 400-million-sqft commercial real estate market over the last few years.
India's services-led economy - the fastest growing in the world - has thrown up a stable market for income-generating commercial real estate, giving investors a chance to list these assets through real estate investment trusts (REITs). These trusts are listed entities holding income-generating real estate assets from which earnings are distributed to shareholders. The Indian market regulator came out with REIT guidelines last year to help real estate and infrastructure developers list their rent-yielding assets, and providing large and small stock market investors with an inflation-indexed product.
Goldman Sachs is partnering with the first-generation entrepreneurial company Nitesh Estates, founded by 37-year-old Nitesh Shetty, to create a platform of assets worth almost $1 billion in the next few years. The still unnamed JV, on which a battery of top lawyers are completing due diligence, is expected to employ leverage financing of up to three times the equity commitment to go on a shopping spree.
Shetty, who built India's first Ritz Carlton Hotel, has in the past worked with several big global investors including Och-Ziff, Apollo Management and Citigroup. When contacted, he declined to comment on speculation. Goldman Sachs, too, offered no comments on this story.
Last week's Union Budget provided some tax clarity on REITs even though certain structuring challenges still remain. Four Indian developers - Embassy Office Parks (Blackstone), K Raheja Corp, RMZ Offices (Qatar Investment Authority) and Prestige Group - are readying to list their assets, which could translate into at least a $20-billion REIT market in the next few years.
The Indian market would rival or surpass Mexico's REIT market, often cited as a successful new world experiment, launched three years ago and with a current market value exceeding $18 billion. New York, London and Singapore have hogged the limelight in developed market.
New York-listed Brookfield Asset Management, with real estate and infra assets worth over $200 billion globally, struck the single largest deal when it acquired the office parks of Unitech for $1 billion - $400 million in equity and $600 million in debt. Private equity giant Blackstone Group, too, struck office park acquisitions worth more than $1 billion in recent years in India.
Blackstone-backed Embassy Office Parks and Brookfield India, with 21 million sqft and 17 million sqft portfolios, are among the top five office landlords in the country.
DLF tops the list with around 30 million sqft.
While foreign investors have mostly invested in office buildings, that too specifically in 125-million-sqft IT SEZs until now, they are turning to the country's hotels and shopping malls which have remained undervalued or, in some cases, distressed assets for a while.
First of all I would like to thank you and the Gera team for organizing different workshops at our doorstep.
The best thing I have done to my kids is that I took a right decision to buy a flat in Gera.
Because of this decision , Vishnu could attend the development workshops that were conducted.
Vishnu was a shy child who didn't like to participate in any of the programmes.
As far as Dale Carnegie workshops is concerned it has given him a lot of confidence and was presenting things in a much better way and I can see a lot of improvement in him.In simple words u made a person(..
My son Tattva had been enrolled in the intermediate level and has been coached by the Vishwanathan Anand Chess Academy coach . Tattva has made remarkable strides and will be on his way to get his FIDE rating in November. A lot of credit goes to the mentor for his unique way of handling his students. He has been very patient while working with Tattva on his areas of improvement. In addition before the tournament the coach had voluntarily added additional classes and doubled his efforts to get a better performance out of Tattva. He has shown complete ownership which is commendable. I hope he continues to develop more and more chess players in the coming days...
It's a wonderful experience with the tennis academy and my daughter liked it. Also she is getting good training and love for the game.
The coaches are good and we would continue using their expertise for Nishita going onwards. We are also looking forward for signing (actually instrument) and dancing coaching too.
This is to share with you that both my little girls (Aditi Anisha) are really enjoying their Tennis classes at the Mahesh Bhupathi Tennis Academy.
I always find them very excited whenever there is TENNIS CLASS, and this excitement matters to both of us, as the kids seems to be interested.
It’s nice to see them constructively engaged, and coming home happy and having felt productive in their own child little way. It’s a great way for them to bond with other young ones and feel belonged to a larger community.
Thanks to You, Gera Developments and MBTA for giving our young ones, an opportunity for a wonderful learning experience.
Now they are looking forwar..
Regarding the workshops & different academy sessions, it has been wonderful experience so far for Shlok and we’re looking forward for the new opportunities.
It’s absolutely fantastic to have all these academies in the premises, and that too from the renowned personalities, so we can send kids without worrying about other factors like safety & all.
And most importantly, a big thanks to you for the lovely follow-ups & timely updates about the upcoming/ongoing sessions.