Deutsche Bank's investment arm RREEF starts India operations, to invest $1 billion

Another foreign major settled down in the country for a chunk of the multi-billion dollar Indian infrastructure pie, as Deutsche Bank's alternative investment management arm, RREEF, launched its realty and infrastructure business today with plans to invest over one billion dollars in the next three years.

This announcement comes in the same month that a global consortium of international lenders announced the creation of a $2-billion fund to invest in infrastructure projects in India. (See: SBI, Macquarie, IFC to float $2 billion infrastructure fund)

RREEF got off to a flying start in its India operations by announcing it has picked up a 60 per cent majority equity stake in a joint venture with NCC Urban Infrastructure Ltd, the realty development arm of Nagarjuna Construction Company. This JV will invest in a $400 million project in the IT / ITeS zone in Hyderabad. T

he 31-acre project will be used to build over five million square feet of office, residential, retail and hospitality space.

Kishore Gotety, country head of RREEF India Advisors Private Ltd., said the company has also invested about $70 million in another Indian company, Golden Gate Properties Ltd., which is involved in primarily residential apartment projects in southern India. This was a majority stake about which details were not provided. He also refused to comment on the price paid for the NCC stake.

Deutsche Bank's RREEF Unit is the largest alternative investment manager in the world, and had $91.3 billion of funds invested in real estate, infrastructure, private equity and hedge funds globally as of 31st December last year. It involvement in the Asia-Pacific region has grown exponentially over the last two years, and now comprises for 15 per cent of total assets under management.

''It's known that India needs more than $450 billion in investments for developing infrastructure,'' said Kurt Roeloffs, RREEF regional chief executive officer based in Singapore, in Mumbai today. ''We think India will be an attractive emerging real estate and infrastructure market for our clients.''

These ambitious numbers were not far from the figure of half a trillion mentioned by the Indian minister for external affairs, Pranab Mukherjee, at the two-day India-Arab investment projects conclave organised by the Federation of Indian Chambers and Commerce and Industry (FICCI) earlier this month. (See: External affairs minister invites more Arab investment in India)

Although Roeloffs termed India as a particularly attractive emerging real estate and infrastructure market, he said that the firm didn't intend to have a country-specific fund, as it has in Japan and Hong Kong.