Rahejas eye $500 million from deal with Temasek, Warburg Pincus

K Raheja Corp, one of the largest developers of IT parks, is in talks with Singapore-based Temasek Holdings and American private equity firm Warburg Pincus to sell stake in its office space holding company, said a source in the know.

The C L Raheja-promoted company wants to sell 20 per cent stake in the office space arm and the final deal could be pegged at around $500 million, sources said. The group started the process two to three months ago.

Sovereign and pension funds such as GIC and CPPIB have stayed away from the deal as it is a minority stake sale, it is learnt. The stake sale could be a precursor to Rahejas hitting the market with a real estate investment trust (REIT). Having a marquee name would help the company while going for the REIT, the source said.

While it could be Temasek’s first investment in Indian real estate, Warburg has a couple of high profile investments in Indian real estate. A Temasek spokesperson said, “As a matter of policy, we do not comment on market speculation”. An e-mail sent to Warburg Pincus did not elicit any response.

Last year, Warburg Pincus invested ~1,800 crore in Ajay Piramal-owned Piramal Realty in one of the biggest FDI in Indian real estate. It has also signed a $250 million (~1,625 crore) JV with Bengaluru-based Embassy group.

Raheja is the third biggest office developer/owner after DLF and Blackstone and it has office properties of 20 million sq ft that are valued at about $2 billion, reports said. The company is investing ~2,000 crore to build a six-million-sq-ft office space after investing in land parcels in Navi Mumbai and Pune. K Raheja could also deploy a part of the fund for inorganic growth in markets like Hyderabad and Chennai, reports said.

Last year, it bought a land parcel in Navi Mumbai from chemicals-maker Cabot Corporation for ~210 crore and is in talks with Standard Industries to buy a land parcel in Navi Mumbai for ~355 crore.