AIG Global Real Estate (AIG GRE), the real estate fund of the global financial major, is looking to exit two projects of Bangalore-based RMZ and raise around $450 mn (Rs.2,000 crore). AIG GRE comprises a group of global companies with AIG that invests in and actively manages $9.4 billion of real estate in various countries.
AIG GRE had invested $350 mn in Bangalore, Hyderabad and Kolkata through a special purpose vehicle (SPV) in 2007. Both AIG GRE and RMZ had then agreed to explore commercial spaces in major Indian cities and “evaluate hospitality development” in such cities. However, the plans were delayed due to global meltdown of real estate.
According to the sources lose to the development AIG GRE had invited bids for the stake it holds in the project and is expecting around $450 million. A global real estate fund is in talks with AIG GRE and negotiations are now focused around the valuation. If the deal goes through, it would mark AIG’s exit from all major investments from India.
Meanwhile, RMZ has said the company has already approached AIG GRE to buy out their stake. “We want to buy out AIG’s 50% stake in our projects in Kolkata and Hyderabad,” a RMZ spokesperson said. “We invited them to come on the table and discuss about the valuations but they have not responded yet.”
RMZ last year bought AIG GRE’s stake in Bangalore SPV for an undisclosed amount. After its exit from the Bangalore project, AIG GRE will be left with 50% stake in both Hyderabad and Kolkata projects.
