Financial Daily from THE HINDU group of publications
Tuesday, Apr 12, 2005
Financial Daily from THE HINDU group of publications Tuesday, Apr 12, 2005 |
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Money & Banking
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Venture Capital Industry & Economy - Real Estate & Construction ICICI Group forays into realty — Arm sets up dedicated fund; partners Tishman Speyer Our Bureau
Ms Renuka Ramnath, Managing Director & CEO, ICICI Venture, at a press conference in Mumbai on Monday. — Shashi Ashiwal
Mumbai , April 11 ICICI Group plans to make a major leap into real estate development, covering both commercial and residential complexes. The group's foray into real estate development will be led by ICICI Venture Funds Management Co, a subsidiary of the bank. ICICI Venture on Monday announced its foray into the real estate and property investment management sector through the launch of a dedicated real estate fund, the India Advantage Fund III, with a corpus of $300 million. This is the second dedicated real estate fund in India. Earlier, HDFC Venture's had launched a similar fund. ICICI Venture also announced the launch of a joint venture company with Tishman Speyer Properties of US, which owns some premium property worldwide, including the Rockfeller Centre and the Chrysler Centre. Both companies will have a 50:50 equity partnership in the joint venture. The new company will take up the development of commercial offices, residential and retail properties throughout India. The company is yet to be christened, but the two partners have decided that it would have its own identity so that it gives India's real estate market a distinct brand name. Equal investments would be made by the partners on a project-to-project basis, which would form part of the equity in the debt-equity mix of the projects. "ICICI Venture will be providing its share of the equity to the new company from its dedicated real estate fund. With its proven track record and knowledge in the development field, Tishman is the ideal partner for us, as we look to expand our activity in the real estate field," Ms Renuka Ramnath, Managing Director and CEO of ICICI Venture, told reporters here. Tishman Speyer has acquired or developed a portfolio of 52 million sq ft, valued at $18 billion since it was founded in 1978. "India is clearly one of the most rapidly growing markets and a leading destination for FDI. We are particularly pleased to have the opportunity to build a long-term presence in India by developing world-class properties," Ms Katherine Farley, Sr. Marketing Director of Tishman Speyer, said. According to Ms Ramnath, the joint venture company is identifying prospective property development projects and the first project is likely to be announced within two months. "Typically, the new company will take up projects involving a size of 120 to 150 acres. These could be commercial, residential or a mix of the two," she pointed out. Meanwhile, ICICI Venture expects to have the first closure of the dedicated real estate fund by the month-end with a corpus of $200 million. The new fund will increase ICICI Venture's total funds under management to about $1 billion. Ms Ramnath said the focus of the fund would be to develop, acquire, lease and sell quality office buildings, residential premises and retail spaces. It will be diversified by investing in projects in growing Indian cities; generally investing 25 per cent of the total capital in a single metro area and no more than 15 per cent in a single project. The fund will actively be looking for investment in tier two cities like Mysore, Ahmedabad, Visakhapatnam and Jaipur.
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