Released on: April 17, 2008, 2:31 am

Press Release Author: varma

Industry: Real Estate

Press Release Summary: 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.



Press Release Body: 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 centres 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 Real estate 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
subprime crisis, may go slow in ploughing 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.
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