News: Starwood to invest $300m in India in next 18 months

(BS 23/11/2006) Mumbai - Starwood Capital, a US-based global real estate fund, has lined up $ 300 million for investment in Indian real estate over the next 12-18 months.

Much of this money is likely to be invested in top 20 cities in the country including tier-2 and tier-3 cities.

The projects where Starwood plans to include Special Economic Zones (SEZ), residential properties and IT parks.

Starwood is also looking to launch its hotel brands in the country - Hotel de Crillon, the luxury brand, 'I'- the ecotel brand and the budget chain, Campanile. Starwood also owns the Sheraton, St Regis and Westin brands.

Of these Hotel de Crillion is likely to be launched first as a part of a global push.

Said Balaji Rao, managing director Starwood Capital India, "We are looking at properties across the spectrum including launching our hotel brands and wherever we find maximum returns and a clear exit route, we will invest in those properties."

However, the company's initial forays in the country are likely to be in mid-sized projects, between 1-3 million sq ft of space.

"Our first investments will be in IT parks and residential projects where the of take is assured and we can exit in 5-7 years time," said Rao.

Starwood Capital has currently about $2.5 bn in capital under management.

It has invested over $5 bn in equity and $14 in debt till now.

Rao indicated that the company would not just invest in property unlike other funds.

"We have worldwide experience in developing property and we would like to bring that to India too.

Therefore, ideally we will for properties or partners with whom we can develop a property jointly in addition to investing as a fund. But this is a tricky market so we don't want to get into it by ourselves, at least for now," said Rao.