Realty play: Qatar wealth fund, Baring to exit RMZ

QIA and Baring hold 24 per cent and 21 per cent, respectively, in the office space developer

Qatar’s sovereign fund Qatar Investment Authority (QIA) and Baring Private Equity Partners India are looking to exit Bengaluru-based property developer RMZ, said sources in the know.

These are the largest exits planned by the investors in a real estate company. While RMZ is buying back the stake held by QIA, Baring is looking to sell its stake to other investors through “price discovery”, sources said. QIA, which has assets of $335 billion globally, invested ~600 crore in RMZ in 2013 sand owns 24 per cent stake. Baring had invested ~450 crore in 2012 and has 21 per cent stake in the company. “We are in the final negotiations with QIA about pricing and the exit should happen by March,” said Raj Menda, co-owner and corporate chairman at RMZ. Menda said the company will fund the exits to the investors through equity and debt.

He said the company has put off its plans to float real estate investment trust (REIT) plans, as the investors are exiting their investments. The company was planning to raise as much as $500 million through listing its REIT, reports said earlier. “Since investors are exiting their investments, there is no need for a REIT now,” he said. Once the buy back is done, RMZ will raise money from QIA for its forthcoming projects, he said. QIA did not respond to a query. When contacted, Rahul Bhasin, managing partner at Baring, said: “If we get right price, we will exit,”

RMZ, one of the largest office space developers in the country, has about 20- million sq ft of office properties in Bengaluru, National Capital Region and Hyderabad.

Menda said the company was expanding its footprint in Bengaluru and buying new properties in Hyderabad soon.

QIA is the fourteenth largest sovereign wealth fund in the world, according to the Sovereign Wealth Fund Institute. Earlier this year, Wadhawan Group India’s ArthVeda Fund Management said Qatar Holding, a subsidiary of QIA, is planning to invest $250 million in an affordable housing fund run by it.

Barings Private Equity Partners India is one of the oldest and largest PE firms in the country with assets of $ 1.1 billion. It has investments in real estate, finance, health care, among others. Recently, it exited investments in Vardhman Textiles and Muthoot Finance.