Shriram Properties, which wants to refinance projects under development and acquire distressed real estate assets may get $125 million PE fund by private equity arms of JP Morgan, IL&FS and Morgan Stanley. Bangalore-based Shriram Properties is the real estate arm of Rs 25,000-crore Shriram Group, but has TPG, Starwood and Walton Street Capital as large shareholders making it a heavily private equity backed Indian real estate developer. These three investors hold over 40% in Shriram Properties, which is developing 30 million sq ft of residential and office space across southern states in the next 2-3 years.
Shriram Properties MD M Murali confirmed fresh $120-125 million fund raising at the project level, but declined to identify potential investors.
“We are still talking to various investors and nothing is finalized,” he said. Sources said JP Morgan was holding talks to invest $75-80 million in Shriram Gateway, which is a 6.3 million mixed use development in Chennai. JP Morgan’s investment could be deployed for refinancing funds raised from Germany’s troubled Hypo Real Estate Bank, which had taken an exposure in this project four years ago.
IL&FS is holding due diligence to invest $25 million into a residential project in Bangalore, while a real estate investment vehicle of Morgan Stanley could also invest a similar sum into another project in the same city, sources added.
The company with 1,000 acre land bank plans to add about 300 acres more, as it is firming up plans to enter hospitality and logistics segments. Besides, Shriram plans to develop a large golf course villa project on 200 acres at Sriperumbadur near Chennai. This could be through joint development or outright land buy.
In the current fiscal, Shriram is developing 9.5 million sqft, but also looking to acquire land and hospitality assets auctioned by Debt Recovery Tribunal (DRT).
