Unitech Enlists Support from Goldman Sachs

Wednesday, January 24, 2007

Unitech, Gurgaon’s well-known real estate developer,
has received support from Goldman Sachs, the New York-based global
investment bank to float a Special Purpose Vehicle (SPV) for investments
in Indian realty.

The Rs.900 crore SPV will have Goldman holding 33% stock, while
Unitech will fund the remaining Rs.600 crore. Though details of
the projects for investment by this SPV have not been announced,
it is expected that the National Capital Region, Mumbai, and land
around Bangalore’s upcoming airport will be focus areas. Projects
near Special Economic Zones (SEZs) could also be considered for
investment.

With the accent on Tier II and Tier III cities in the Indian
real estate market, investment in Greenfield residential
and commercial property is also being speculated.

Unitech is India’s largest real estate publicly listed company
with a market value of over Rs.38, 000 crore. It started with commercial
and residential property in Gurgaon, constructing landmark structures,
to later expand to large-scale projects across the country. Unitech
has determined a Rs 7,000 crore investment plan to build 15 hotels
and seven IT SEZ parks in the next five years. The company is already
developing hotels in Gurgaon, Noida and Kolkata and a service apartment
in Gurgaon. This real estate giant also has SEZ projects in the
pipeline in Chennai, Gurgaon, Kolkata, Kochi, Noida and Greater
Noida.

Goldman Sachs has been exploring investment
options since April 2006 when it disclosed its decision to reserve
Rs.4, 500 crore for Indian real estate, private equity, and private
wealth management over the next couple of years. The bank disengaged
from its Indian partner Kotak Mahindra last year, but had plans
to start independent asset management services in the country.