Starwood, Walton to develop HM’s land in West Bengal

                                                                                         

Two international property and hospitality funds — Starwood Capital and Walton Street Capital, both from the US — have joined hands with Hindustan Motors (HM), flagship company of the CK Birla group, and Chennai-based real estate developer Shriram Properties to develop HM’s excess land in West Bengal.

The two funds will invest over Rs 3,000 crore to develop HM’s real estate assets. The deal is likely to be announced on Tuesday. When contacted, Starwood Capital’s India head Balaji Rao declined to comment on the deal.

HM chairman CK Birla said, “As part of our revival programme, we have decided to develop part of our Uttarpara facility as a real estate property. Out of the total 700 acres, we will be developing 314 acres as a township. Starwood Capital and Walton Street Capital will be financial investors in the project.”

The fund infusion by the US investors comes close on the heels of an agreement signed between HM and Shriram Properties to jointly develop the land. Sources said HM and Shriram have proposed to set up an integrated IT township and auto park in the 314-acre property in Uttarpara.

A special purpose vehicle has been set up for execution, in which Shriram, Starwood and Walton Street Capital will hold around 30% each, while HM will hold the remaining. Starwood Capital began its full-fledged Indian operations in early 2006 while Walton Street Capital kicked off a few months ago.

Both these funds have plans to invest over $500 million in the Indian real estate market. Starwood plans to launch in India its luxury hotel brand Hotel de Crillon, an eco-friendly hotel brand ‘I’ and a budget hotel chain, Campanile. Walton Street Capital had raised $2.5 billion to invest in emerging markets, including India, a month ago.

India’s economy is fuelling demand for more houses and commercial space, and has drawn many leading realty and PE funds. Morgan Stanley, Lehman Brothers, HSBC, ABN Amro, JP Morgan and Merrill Lynch, among others, have either invested or on the lookout for deals in here.

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Source: IndiaRealEstateblog

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