News: Tata planning $1 billion realty fund

(RTR 19/02/2007) Mumbai - Tata group is planning to launch a realty fund to invest up to Rs 4,500 crore ($1.02 billion) in the country's booming property sector, the Times of India newspaper reported on Monday.

A spokesman for the group said it was drawing plans for real estate but could not immediately confirm any details.

The newspaper said the real estate business would be headed by Dinesh Chandok, former chief executive of Ansal Properties Foreign investors will also be involved in the fund, it said.

India's real estate sector has seen rapid growth in recent years on the back of robust economic expansion. Global players such as Warburg Pincus, AIG , 3i and Deutsche Bank have been attracted to India after rules on foreign investment in real estate were eased in early 2005.

Last week, Merrill Lynch Capital Markets Espana SA said it had bought a further 4.73 per cent stake in Indian real estate developer Prajay Engineers Syndicate Ltd. , raising its stake in the company to almost 8 percent.

In January, Morgan Stanley Real Estate said it had paid $152 million for an undisclosed stake in Indian property developer Oberoi Constructions Ltd.

Recent initial public offerings by Parsvnath Developers Ltd. and Sobha Developers Ltd. drew demand for more than 50 times the offer size.