Citigroup Property Investors to invest $120 mn in Nitesh Estates’ luxury hotels business

New York-based Citigroup Property Investors (CPI) will invest around $120 mn in Bangalore-based Nitesh Estates’ luxury hotels. CPI would partner with Nitesh Estates on the latter’s forthcoming hotel properties. CPI reportedly also has committed itself to 30% in the group’s recently announced $100 mn 5-star hotel property on Bangalore’s Residency Road. Nitesh Estates is planning to build four more hotels in Goa, Chennai, Hyderabad and Kochi. The company is believed to have acquired land in Goa and is in the process of acquiring land in other locations. CPI has already invested close to $250 mn in India and plans to invest a further $500 mn. Of this, around 40% is expected to be invested in hotels and service apartments. Nitesh Estates had earlier received a PE funding of $100 mn from New York-based Siachen Capital for an undisclosed stake and was also known to have divested a 25% stake for $55-60 mn to New York-based hedge fund Och-Ziff Capital Management Group.

Read the Business Standard article.

Oberoi Constructions receives Rs. 675 crores from Morgan Stanley Real Estate Fund

Morgan Stanley Real Estate Fund has invested Rs. 675 crores (approximately $152 mn) in Mumbai-based Oberoi Constructions for an undisclosed stake. The private equity deal is said to be the largest in the Indian real estate sector. Fourteen other funds, including Blackstone, Carlyle, and GE, were in the race to acquire the stake in Oberoi Constructions. Morgan Stanley Real Estate Fund recently invested $67.4 mn in Mantri Developers. The fund looks at a return of more than 30% annually.

The company has projects lined up for Pune, Hyderabad and Bangalore for which it will acquire land. It has interests in both commercial and residential projects. It plans to diversify into shopping malls, hotels, hospitals and education centres. It has ongoing residential and commercial projects in Mumbai’s suburbs – the Oberoi Mall in Goregaon, Oberoi Chambers and Garden Estate in Andheri, among others.

The real estate company has been valued at $1 bn by Kotak Mahindra Capital, the advisors to the deal. Anand Madduri, Executive Director, Morgan Stanley Dean Witter Asia, will be joining the Oberoi Constructions’ board.

The real estate sector is growing at a whopping 35-40% and has seen large private equity deals in the last few months with nearly $350 mn in investments flowing into the sector. Siachen Capital has invested $100 mn in Bangalore-based Nitesh Estates, HDFC Real Estate has invested $35 mn in the Ansals IT City and Parks and another $31 mn in Pune-based developer Vascon Engineers. More than 20 funds are interested in the sector.

Read The Economic Times article for more details.