German banking biggie, Deutsche Bank plans to invest over $1 billion (Rs 4,000 crore) in Indian real estate and infrastructure sectors over three years.
The bank plans to make the investment through RREEF Alternative Investments, its global alternative investment management business, which formally launched its real estate, infrastructure and private equity business in India on Monday.
"We are seeing opportunities in the New Delhi railway station," said Kishore Gotety, country head of the Mumbai-based RREEF India Advisors.
The government has proposed to privatise terminal operations, development of railway land around the stations, PPP in new routes, logistics parks, cargo aggregation and warehouses for 22 railway stations.
RREEF India Advisors has been established with an initial team of six investment professionals, who will provide real estate and infrastructure advisory services to RREEF's offshore funds.
Gotety, who has recently joined from ICICI Ventures, sees opportunities in roads, airports, power, ports and railways within the infrastructure space. "We are bullish on the real estate space for the medium-to-long term period. The current price correction in the real estate sector is a result of asymmetry between demand and supply," he added.
"We are seeing interest from some of the less well-capitalised real estate players in India currently. There is greater flexibility in the economic terms that they are willing to offer," said Kurt Roeloffs, MD and CEO (Asia Pacific), Deutsche Asset Management.
RREEF Alternative Investments (RREEF) has acquired a 60 per cent equity stake in a joint venture (JV) with the Nagarjuna Constructions-promoted NCC Urban Infrastructure to develop a $400 million (Rs 1600 crore) mixed-use project in the IT/ITeS zone in western Hyderabad for an undisclosed amount.
The 31-acre greenfield site is located at the Narsingi junction, adjacent to Phase-I of the outer Ring Road connecting the IT zones of Madhapur and Gachibowli to the new international airport at Shamshabad.
Currently at its final planning stage, the project is expected to comprise over 5 million square feet of office, residential, retail and hospitality space. Subject to development approval, the JV plans to develop the site in two phases over 5 years.
In January this year, RREEF had taken a significant minority stake in Bangalore and Hyderabad-based residential real estate development company, Golden Gate Properties, for $70 million (Rs 279 crore), which has a development pipeline of over $1.25 billion of primarily residential projects. RREEF's recent investments in these transactions were out of its global fund.
"At present, we have two Asian funds dedicated to Japan and China. In the future, we may look at having an India-specific fund," said Roeloffs.
"We have not really evaluated the Real estate mutual fund (REMF) guidelines, but we will look at selling some assets. If the regulator clears Real Estate Investment Trusts (REITs), then we will definitely look at that asset class since we are more comfortable with that and have done that earlier in other markets," added Roeloffs.
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