Global PE duo to invest $500 Mn in Unitech SPV

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New Delhi: Private equity players Lehman Brothers and Deutsche Bank will jointly invest $500 million in an SPV floated by Unitech, India's second most valued real estate developer, reported The Economic Times. A source close to the development says that the two PE players are in advanced stage of negotiations with Unitech to pick up a minority stake in the SPV formed to execute two commercial projects in Mumbai. The two projects, located in the Santa Cruz area of Mumbai, are likely to have a combined developable office space of 2 million square feet. The deal is expected to be closed in the next three weeks, according to the source. This injection of fresh funds would come as a relief to Unitech, which recently put on hold its $1 billion qualified institutional placement (QIP) and listing of its Singapore Reit (Real Estate Investment Trust) due to poor market sentiments. The market volatility and the news that Unitech was putting off its QIP and Reit listing have severely affected company's stocks in the past couple of weeks. Unitech has lost almost half of its market cap since the beginning of the year. The Santa Cruz project may be one of the first to be completed by Unitech in Mumbai. The company has largely been an NCR player, with a good 70 percent of its revenue coming from this region. The Gurgaon based firm, however, is now foraying into other parts of the country, and, perhaps, more aggressively in Mumbai. Unitech had announced its entry in the Mumbai market last year with a 97 acre commercial project in Bandra-Kurla Complex. The likely Unitech-Lehman-Deutsche deal apparently drives home a point that although poor market conditions might have slowed down PE deals, big money is still following certain opportunities in India.

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