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Betting big on the Indian real estate market, Goldman Sachs has said it is investing $150 million (Rs 960 crore) for a minority stake in Piramal Realty.
“We will utilise these funds for further expanding our real estate portfolio and acquiring prime properties in and around Mumbai,” said Piramal Group executive director Anand Piramal. “Our focus will continue to remain on the Mumbai Metropolitan Region, as we see huge scope for growth there, given the inadequate supply of affordable housing.”
In July, Piramal Realty, an arm of the Piramal Group, had received an investment of Rs 1,800 crore from global equity firm Warburg Pincus for a minority stake in the firm. In 1997, Warburg Pincus had invested in Piramal Healthcare.
Goldman Sachs, which has invested about $2.5 billion in India since 2006, has helped develop some of the world’s finest buildings, such as 15, Central Park West, in New York and 16, Colleyers Quay, in Singapore, according to a company statement.
“Their experience and expertise will further inspire us to build world-class developments in India and achieve the highest standards of design, technology, quality, execution and customer service,” Piramal said.
Ankur Sahu, co-head (private equity), Asia, Goldman Sachs, said, “This investment is consistent with our ongoing strategy of partnering India’s leading entrepreneurs to invest in sectors critical to the country’s development. The government’s focus on simplifying regulation and boosting economic growth will kick-start investment and consumption.”
Globally, Goldman Sachs is one of the largest real estate investors, with an investment of about $43 billion in the sector, according to reports.
Through the past few months, the Indian realty sector has been attracting global investors. In July, Oberoi Realty raised Rs 324 crore from Aranda Investments, an indirect subsidiary of Temasek Holdings. In May, Goldman Sachs and Nitesh Estates said they would invest $250 million in buying assets. In July last year, Piramal Enterprises and Dutch pension fund asset manager APG Asset Management had announced an alliance to invest in mezzanine instruments (a hybrid of debt and equity financing).
Piramal Fund Management, a Piramal Group company, lends to real estate developers through debt and equity. Last year, the group’s flagship company, Piramal Enterprises, had entered into an alliance with Canada Pension Plan Investment Board to set up a $500-million real estate finance company in the country.
Piramal Realty has about 10 million sq ft of commercial and residential projects under development in Mumbai, across Bandra Kurla Complex, Mulund, Worli and Thane. In the next few months, the company plans to launch Piramal Vaikunth in Thane, a mixed-use complex across 30 acres.
