PREI, Beekman Helix Form India JV

Prudential Real Estate Investors has launched a joint venture with Beekman Helix India Partners L.L.C. to invest in middle-income residential development projects and office parks in India for institutional investors. Operating as Pramerica BHI, the private equity real estate platform will be headquartered in Guragaon near New Delhi. The launch strategy initially will be to invest up to $500 million, a PREI spokesperson told CPN today. The spokesperson said the joint venture would be starting where there is the greatest need in India, which is for middle-class residences to house the rapidly expanding population. Eventually investments would be made across all the sectors. “If you look at how we entered Mexico, how we entered China, how we enter a lot of emerging real estate markets, we often start where the need is greatest. In Mexico, it was residential and industrial,” the spokesperson added.PREI and BHI have worked together since 2006 in India, investing about $220 million in 11 transactions in seven Indian markets, including Bangalore, Chennai, Mumbai, the National Capital Region and cities in Punjab, according to PREI. A Jan. 24, 2007, CPN report noted the two firms had committed to spend at least $50 million in India. At that time, PREI was acting on behalf of German institutional investors in its Asia Property Fund I and had already participated in three investments in a mezzanine program managed by BHI, according to the CPN story. “The first (investment program) was sort of dipping our toes into the water. We’ve done 11 transactions so far that were all small mezzanine deals,” the PREI spokesperson said. “They are going pretty well so we decided to make a full commitment to the region…This will be a long-term commitment to India.” Shekar Narasimhan, CEO of BHI, noted in today’s release that the two companies have “built a team on the ground that can patiently source opportunities and actively manage them through fruition.” “India is one of the fastest-growing economies in the world and Pramerica BHI India is well-positioned to take advantage of the growth in quality commercial real estate both in the short- and long-term,” Manish Parwani, CEO of the joint venture and senior portfolio manager, stated in the news release. Citing a McKinsey Global Institute report, the companies noted that about 30 percent of India’s population lives in urban areas now, a number that is expected to grow to 40 percent by 2020. PREI estimated that India’s GDP could grow by 8 percent this year, according its recent Asia quarterly report. As of March 31, PREI, which has offices in the United States, Europe, Asia and Latin America, managed $45.1 billion in gross assets ($31.5 billion net) for more than 400 clients. Earlier this month, CPN reported that PREI had formed a joint venture with Mexican developer Grupo Concord to develop the second phase of the CostaBaja Resort & Marina on the Sea of Cortez. The June 5 article noted that PREI was acting on behalf of institutional investors and expected to invest up to $800 million in the project over the next few years. In another recent joint venture, PREI teamed up with Racional Engenharia to invest in the Brazilian industrial real estate market. An Oct. 24, 2007, CPN article reported that, including leverage, PREI could invest up to $1 billion in that joint venture.