The Hindu Business Line : HDIL plans tie-up with Lehman Brothers

Housing Development and Infrastructure Ltd (HDIL), the real estate arm of the Wadhawan Group, is likely to partner New York-based Lehman Brothers in the proposed hospitality venture in Mumbai.

According to industry sources, HDIL is in talks with Lehman Brothers Real Estate Partners (LBREP), the real estate private equity fund of Lehman Brothers, to form a joint venture for developing a luxury hotel on Juhu Beach in Mumbai.

DS Corporation, a builder and real estate contractors firm in which HDIL has 45 per cent stake, will build the proposed hotel.

According to sources, Mr Kapil Wadhawan, Director of HDIL, was in New York to negotiate the deal.

When contacted, HDIL officials confirmed that Mr Wadhawan was in New York, but refused to say anything further.

“We are planning to rope in an international partner for the proposed hotel. HDIL will have 45 per cent stake in the joint venture,” a senior Group official told Business Line.

He refused to give further details on the project including the size of the investment.

“We cannot comment on this now. We are in talks with several players (for the hospitality project),” another HDIL official said.

LBREP’s inaugural real estate private equity fund, LBREP I, closed in 2001 with over $1.6 billion in aggregate commitments and has been fully invested.

The $2.4-billion second fund, LBREP II, closed in 2005.

It makes direct private equity investments in properties, real estate companies and service businesses ancillary to the real estate industry in North America, Europe and Asia.

Lehman Brothers also has a $1.1-billion mezzanine investment vehicle called Lehman Brothers Real Estate Mezzanine Partners, which closed in August 2005.

It invests in mezzanine debt and other high-yielding investments in real estate, primarily in the US.