Walton Street of US will invest Rs 1000 crore in realty

MUMBAI- THE US-based hospitality and real estate fund Walton Street Capital (WSC) has decided to invest Rs 1,000 crore in the booming Indian real estate market in 2008. It has already united with property developers for investing Rs 600 crore at the project level. These investments will be made in special purpose vehicles (SPV) floated specially to implement projects.WSC managing director Sourav Goswami told that The fund is in talks with three Indian developers for the residual investments, which is expected in next couple of months.Previous year, the $13 billion Chicago-based WSC invested about Rs 800 crore in a number of SPVs, including 20 percent in Shriram Properties. The fund has invested in retail malls, office buildings, housing and hospitality. Though the real estate sector seems less attractive for investments because of the high interest rates and fall in sales, Mr Goswami said India’s growth story will continue like this, which in turn will help the infrastructure and real estate sectors.Foreign and domestic funds poured $6.8 billion in the real estate and infrastructure sector last year, compared with about $3.5 billion in the previous year. A booming housing sector and surging demand for commercial property has companies guzzling equity and sometimes even debt money provided by the funds.

The US-based global fund has received equity commitments of $3.5 billion from public and corporate pension funds, foreign institutions, insurance companies and banks, endowments and foundations, trusts and high net worth individuals. It has committed to invest in 162 deals in the global real estate, including the development and acquisition of office, hotel, retail, industrial, multi-family, for-sale residential, senior and student housing, and golf assets.through both individual, portfolio and company-level transactions with a gross asset cost of $14 billion.
The year 2007 was the banner year for Indian real estate with estimates of over $5 billion of foreign funds flowing into projects. Another theme for the year was public offerings. With DLF listing, which energised the market, several developers proceeded to go public in India, creating a robust market for retail investors, said industry analysts. “

The picture has never been murkier in 2008. With fears of a looming US recession putting the brakes on worldwide growth and its resulting liquidity, a jerky market seems to be ahead. For fund managers, some will view the confusion as a hint to restrain investing in historically unstable emerging markets. Mr. Goswami told that others will view it as an opportunity to deploy equity into Indian markets which is still optimistic. WSC, in joint venture with Shriram Properties and Starwood Capital Group, is developing a Rs 5,000 crore incorporated township in Kolkata.

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