Citi Realty Arm to Buy 10% Stake in Golden Gate for Rs 400 Crore
CITIGROUP’s real estate arm is set to invest around
Rs 400 crore ($100 million) in Bangalore-headquartered Golden Gate Properties
for about 10% stake, sources said. The deal is expected to value the
tier-II real estate firm at a little over $1 billion. This marks Citigroup’s
back-to-back deals in the domestic real estate space in the last fortnight.
Early last week, the global financial giant unveiled $160 million play
in Delhi-based BPTP.
Golden Gate is primarily into residential market with
about 20,000 units under development totaling 23 million sq ft across
southern cities such as Bangalore, Chennai and Hyderabad. The company
also has substantial land holdings extending into emerging centers like
Mysore and Mangalore. Besides, Golden Gate is believed to be foraying
into SEZ and mixed use development.
In January this year, Deutche Bank investment unit
RREEF closed $70 million transaction picking up under 10% stake in the
company. The private equity juggernaut is now increasingly open to investing
in tier-II or even in start-up realty firms, as the sectoral transparency
issues are clearing up to an extent.
Citi’s fresh investments are coming in when it was
expected that the largest banking group in the US, reeling under $18
billion write-offs due to the sub prime crisis, may go slow in sloughing
more money into the realty sector in India. Several global banks have
booked massive losses as the financial crisis that kicked in with the
meltdown in the US housing market gained speed in the last two quarters.
However, more realty firms are now opening up to private equity as their
fund raising plans in the capital markets have run into trouble. For
instance, several firms, including the biggest domestic player DLF,
have been eyeing REIT listing on the Singapore Exchange, but are forced
to delay the plan in the wake of market turbulence.
Deal is expected to value Golden Gate Properties at a little over $1
billion
Golden Gate is primarily into residential market with about 20,000 units
under development
Real estate firm is also believed to be foraying into SEZ and mixed
use development
In January this year, Deutche Bank investment unit RREEF closed $70-m
transaction picking up under 10% in the company
Photo: North Quay construction site – 2024-11-08 by Sludge G, licensed under CC BY-SA 2.0, via Wikimedia Commons.
