 "China property is so attractive, couples are divorcing over it")
The investment banking arm of US-based Morgan Stanley has become the favourite adviser to real estate developers seeking money through stake sales in rental subsidiaries and real estate investment trusts.
Morgan Stanley's investment banking arm, headed by V K Bansal, is handling a stake sale by the promoters of DLF in the the group’s rental arm DLF Cyber City Developers to raise an expected Rs 12,000 crore. It is also handling a stake sale by promoters of K Raheja Corp in its office rental arm to raise an expected $500 million.
The investment bank is handling the REITs of Blackstone, the Bengaluru-based Embassy group and the Pune-based Panchshil Realty. While home grown JM Financial is involved in K Raheja Corp stake sale, US based JP Morgan is handling stake sale by Prestige promoters in rental arm and DLF stake sale in rental arm. Morgan Stanley is also in talks with developers in Bengaluru and Mumbai for selling stakes in their rental companies, according to sources. Put together, it is helping developers raise over $3 billion. A e-mail to Morgan Stanley did not elicit a response.
Morgan Stanley's rise in investment banking in real estate coincides with its real estate investment arm going slow in India. It was now looking to raise a new fund for India, sources said. This development could not be verified independently.
“They have always been there in the market. But now they are visible as developers have started raising money,” said an executive with a global fund manager. Morgan Stanley normally looked at deals over $100 million, the executive added.
Developers said Morgan Stanley's global expertise made them opt for it. “They have helped many developers globally to raise funds. They have a good understanding of REITs,” said an executive with a Mumbai-based real estate company.
“Bansal and his team have done a lot of work on REITs and have worked with both the Securities and Exchange Board of India and the finance ministry,” the executive said. “Blackstone recommended their name as they share good rapport,” added another executive with a real estate company that plans to float a REIT.
Morgan Stanley raised a $1.7-billion global property fund last year, its biggest since the global financial crisis.
“Morgan Stanley Real Estate Investing delivers an exceptional combination of industry expertise, local market presence and global perspective, and the success of this capital raise reflects how our clients have recognised and responded to these strengths,” Ed Moriarty, head of merchant banking and real estate investing at Morgan Stanley, said last year.
HANDLING CRUCIAL DEALS
- Banker in $2-billion stake sale in DLF rental arm
- Banker in $500-mn stake sale in rental arm of K Raheja Corp
- Advisor in $600-mn Reit issue by Embassy Blackstone
- Advisor in Reit issue by Panchshil and Blackstone
- i-banking division headed by veteran banker V K Bansal
- Put together, it is helping developers to raise over $3 billion in funds
