The platform, to be set up in the form of an Alternative Investment Fund (AIF), will see Ivanhoe Cambridge initially investing $150 million (about 1,110 crore).
“The deal is expected to close by September and this will be the first commercial platform from Ivanhoe Cambridge. The fund has been on the lookout for a partner for the office platform,” said one of the persons mentioned above.
The proposed entity will be looking for greenfield investment opportunities, while Embassy will also bring in some of its existing land bank for the development together with the Canadian company. “Ivanhoe will own around 80% stake in the platform, while the remaining stake will be held by the Embassy Group,” said the second person quoted above.
Ivanhoe Cambridge and Embassy Group declined to comment. This platform will be merged with the proposed combined Indiabulls-Embassy entity once the merger gets concluded, for all future developments. Embassy will be responsible for managing the development for the newly-built platform.
Indiabulls Real Estate and two subsidiaries of Embassy Group have entered into a definitive agreement to merge their residential and commercial projects across markets to create one of the largest property development platforms in the country. The combined entity will hold both the developers’ ongoing, completed but unsold and planned projects with 80.8 million sq ft of development potential. This exercise marks Indiabulls Group’s exit from real estate business.
Embassy Group already has an alliance with US PE major Blackstone Group for buying ready and leased office properties in India. This alliance between Embassy and Blackstone will continue, while the proposed partnership with Ivanhoe will look for opportunities for new developments.
Global institutional investors, including Blackstone Group, Brookfield Asset Management, Singapore’s sovereign fund GIC and Goldman Sachs have been investing in Indian realty assets for the past few years. In addition to this, more funds are eyeing investment and alliance opportunities.
Ivanhoe Cambridge also has a strategic co-investment platform with Piramal Enterprises to provide long-term equity capital to large residential developers across the five major metro cities in India — Mumbai, Bengaluru, NCR, Pune and Chennai.