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Indian Real Estate News : Bangalore
Shriram Properties buys land from Citi group for Rs 101 crore
Source: ET Bureau Sep 18, 2012
Real estate developer Shriram Properties has bought prime land parcels in Bangalore's Sarjapur and Hyderabad's Shamirpur from the Citi Group for Rs 101 crore. "The land was a mortgage to Citi Group and was sold at a discounted rate to Shriram Properties as the borrower failed to service the loan," says a person having direct knowledge of the transaction.
Shriram Properties has raised Rs 100 crore from ASK Property Investment Advisors to buy both the land parcels. Shriram Properties managing director M Murali confirmed the deal but refused to share details.
The real estate unit of the $9-billion southern conglomerate Shriram Group and private equity fund ASK will jointly develop the property. According to Shriram Properties, the 16-acre project, targeted at the upper-middle income group, will comprise apartments and villaments priced between Rs 5,000-7 ,000 per sq ft.
The company expects the project to generate revenue worth Rs 700 crore in the next 3-4 years. "Both Shriram Properties and ASK will have equal stake in the projects in Bangalore and Hyderabad. It is looking to build a villa project on the 20-acre plot in Hyderabad and is finalising the details," says the person.
ASK has already made three investments - two in Mumbai with Rajesh Builders and Godrej Properties and one in Bangalore with Mantri Developers. This investment is part of Rs 1,000 crore raised through the ASK Real Estate Special Opportunities Fund in 2012.
ASK manages domestic real estate funds of more than Rs 1,300 crore. Shriram Properties is also in the process of raising additional Rs 350 crore from private equity funds to buy 100-acre land across Coimbatore, Chennai and Bangalore. "The company is in the final stage of negotiation with the private equity fund and is expected to close the deal in a month or two," says the earlier person.
Besides, the Bangalore-based builder is close to signing a Rs 500-crore transaction with Singapore listed technology park developer Ascendas for selling its 1.3 million developed IT special economic zone in Chennai. The IT park, part of 58-acre large integrated township project, currently houses tenants such as Accenture and Mahindra Satyam among others and has a potential to develop 3.2 million sq ft of additional space.
The builder bought the land from Standard Motors Factory in 2006. Shriram Properties had raised a slew of private equity funds to expand its footprint across the south and to buy distressed assets in the market.
The developer, which raised money from Walton Street Capital, Starwood Capital, ICICI Prudential Asset Management Company and Sun Apollo at project levels, has 20 million sq ft projects under development across the south.It has a land bank with a development potential of 40 million sq ft in cities like Chennai, Bangalore, Coimbatore, Visakhapatnam and Kolkata, and its product portfolio consists of 75% residential and 24% commercial projects. According to Venture Intelligence, private equity firms invested $162 million across six deals in the June quarter compared to $553 million across 14 transactions with disclosed values in the same period last year.

New Buys, New Partnership

The land parcels in Bangalore & Hyderabad were a mortgage to Citi Group and were sold at a discounted rate to Shriram Properties as the borrower failed to service the loan
Shriram Properties has raised Rs 100 crore from ASK Property Investment Advisors to buy both the land parcels. ASK's investment is part of Rs 1,000 crore raised through the ASK Real Estate Special Opportunities Fund in 2012. ASK manages domestic real estate funds of more than Rs 1,300 crore

Tag: india real estate, bangalore properties, bangalore real estate, Shriram properties
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