Shriram Prop enters hospitality & logistics

After Shriram Properties Ltd recently secured a $100 million (Rs 440 crore) investment from private equity (PE) firm TPG Capital, in one of the largest such deals in India’s real estate sector, the company is working on expanding across India with two new businesses –hospitality and logistics. The company, so far focused on residential developments in southern India, will deploy most of the new money in setting up two wholly owned subsidiaries as it diversifies its portfolio, managing director M. Murali said.
It will spend the balance on buying about 600 acres of land in the next 18 months to expand its real estate business in southern India. Shriram Properties, part of the Rs 25,000 crore Shriram Group, is one of the few cash-rich developers in the depressed sector, even after it decided to defer a share sale. “We are now putting together teams for warehousing and hospitality and looking for land parcels between 20-50 acres each for our real estate business,” said Murali. “We will also buy distressed assets at a discount for the hospitality business, instead of developing hotels ourselves, and explore such opportunities in the office space and residential space too.”
So far, Shriram Properties, which has a 1,000-acre land bank, has received Rs 936 crore of PE investments for its various projects. The latest deal was at the company level. Before TPG, Walton Street Capital had invested in Shriram Properties in 2007.
 TPG Capital has invested Rs 325 crore in Shriram Properties in the first phase of funding and will give the balance before March. Shriram Properties currently has 6.5 million sq. ft of space under development and plans to add 3.6 million sq. ft with its new projects this fiscal year.