Tatas enter realty foray

For Ratan Tata it is now time to do a realty check. Tata Sons, the group holding company gave a go ahead to the real estate strategy for the entire group. The realty foray will be through two main vehicles, Tata Housing and Development Corporation (THDC) and the recently launched Tata Realty and Infrastructure Ltd (TRIL). TRIL will launch a Mauritius-based $1 billion realty fund where Tata Sons will put in Rs 800 - Rs 900 crore as equity in tranches. Initially, the fund itself will have a smaller corpus of $750 million where Tata Sons will put in 15 per cent or around $100 million. Negotiations for funds Sources in Tata Sons say that the group is in advanced negotiations with a clutch of financial investors like PE funds Carlyle and Warburg Pincus, who are keen to chip in as co-investors. Talks are also in the last leg with Macquarie Bank, Citigroup and a consortium of Japanese banks. Sources in Bombay House say that initially the plan is to try and develop the real estate assets that currently exist within the group. Group companies like VSNL, Tata Chemicals, Tata Tea, Tata Power and Voltas have assets across metros and Tier I cities like Bangalore, Mumbai, Delhi, Chennai, Kolkata and Pune. The focus will be to monetise these assets in the beginning into commercial, office spaces and residential complexes. Besides, even though the group companies will not get big consessions, they will enjoy a first right of refusal. Banking on land Valuation of the group's total real estate assets is estimated at a whopping Rs 15,000 crore. In phase I, 150-300 acres will be developed in the metros. "We are evaluating what to do with our real estate. We have some plans," said Prasad Menon, MD, Tata Power. Tata Housing, a 100 per cent subsidiary of Tata Sons will be the nodal agency for most of the realty development. Currently, THDC is developing eight townships across India, investing Rs 1,500 crore over two years.