RREEF, the global alternative investment management business of Deutsche Bank, advised by Deutsche Asset Management (India) Pvt Ltd, has made its first real estate investment in India. RREEF has substantially completed the purchase of an undisclosed stake in Bangalore and Hyderabad-based real estate development company, Golden Gate Properties Ltd, for US$ 70 mn (Rs. 2735 mn).
Golden Gate Properties Ltd is an integrated real estate development company involved in primarily residential apartment projects in India. The company has been operating since 1997 and has to date a portfolio of 10 completed projects 8 residential apartment developments and 2 commercial projects in established neighbourhoods within Bangalore and Hyderabad.
In addition, Golden Gate is in the process of building 20,000 units across 9 projects, with a built-up area totaling 23 million square feet. It also has plans to build mixed use developments and Special Economic Zones (SEZ) across South India.
India is presently a particularly attractive emerging real estate market for our high return oriented clients and in time will mature into an important investment destination for RREEFs broader base of institutional and retail clients. Golden Gate Properties can provide us an important cornerstone to our further investment in India. said Kurt Roeloffs, Chief Executive Officer Asia Pacific, RREEF.
Mumbai-based Kishore Gotety, who heads Deutsche Asset Managements real estate and infrastructure advisory services arm in India, highlighted the key elements that made the investment attractive. Golden Gate Properties is an experienced developer with a strong track record in completing projects. I believe that there is strong and growing demand for quality housing by domestic and foreign workers in the middle-income residential sector and Golden Gate projects are typically located in some of south Indias fastest growing centres for IT activity, he said.
Bangalore and Hyderabad are Indias fifth and sixth largest cities respectively. Bangalore has a population of over 8.4 million people and is among the fastest-growing cities in the country. The state of Karnataka, of which Bangalore is the capital, was the third largest recipient of foreign direct investment (FDI) in India for the period between January 2000 and December 2005, attracting over US$1.4 billion in foreign investment. Over the past 13 years, nearly 1400 foreign IT-related companies have established offices in the city. As a result, nearly all property types in Bangalore exhibit strong fundamentals. Hyderabad has an urban population of over 3.6 million people, and is the capital of the state of Andhra Pradesh. The city has evolved over recent years from being primarily a research and development hub, into an emerging IT and biotechnology location. Many foreign companies have also set up operations in the region.
K. Pratap, Managing Director from Golden Gate Properties said, We are particularly excited about our partnership with RREEF, a leading global real estate investor, as this will allow us to further capitalize on the significant growth opportunity and at the same time provide us access to their global real estate franchise, expertise and relationships. Looking forward, Golden Gate will continue to focus on its core business in Hyderabad, Chennai and Bangalore while seeking to grow its presence by selectively undertaking developments in other asset classes in cities which are witnessing a similar demand for IT/ITeS companies. The increasing growth of the service sector is expected to push growth in the residential and commercial real estate markets in key centres across India for years to come, he said. Golden Gate was advised by Fortune Financial in this transaction.
RREEF Alternative Investments is the global alternative investment management business of Deutsche Banks Asset Management division. RREEF Alternative Investments consists of four businesses: Real Estate, Infrastructure, Private Equity and Hedge Funds. Headquartered in New York, RREEF Alternative Investments employs more than 1,400 investment professionals in 17 cities around the world to help investors meet a wide range of objectives from diversification, to preservation of capital, to long-term performance. Named the worlds largest alternative investments manager in Global Investor/Watson Wyatts Alternative Survey, June 2007, RREEF has EUR 68.2/$97.3 billion in assets under management worldwide as of 30 September 2007.
Deutsche Asset Management (India) Pvt Ltd is the advisor to RREEF offshore funds. RREEF is the brand name associated with Deutsche Asset Management India for its real estate and infrastructure investment advisory services division.
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