Warburg Pincus to launch $315m real estate venture

Warburg Pincus will partner with Lemon Tree Hotels to launch Oceanus Real Estate, a joint venture focusing on affordable housing projects in India.

New York-based private equity firm Warburg Pincus has partnered with one of its portfolio company Lemon Tree Hotels to launch an INR14 billion (€216million; $314 million) joint venture focusing on affordable housing projects in India.

Lemon Tree will control 51 percent of the partnership, dubbed, Oceanus Real Estate, while Warburg Pincus will hold the remainder, the spokesperson acknowledged.

“The joint venture with Warburg Pincus will develop at least three to four affordable housing projects in Gurgaon,” Lemon Tree Hotels chairman and managing director Patu Keswani told Indian newspaper Economic Times. Out of a total planned investment of INR 14 billion by 2015, the company will invest INR7 billion while Warburg Pincus will provide INR 7 billion separately, he added.

Warburg Pincus declined to comment on the development.

Warburg Pincus acquired an undisclosed stake in Lemon Tree Hotels for INR2.8 billion (then €47 million; $60 million) in September 2006.

In May 2008, the firm made a similar deal when it invested $75 million to partner with Unique Affordable Homes, an affordable housing development company owned by real estate developer the Mannat Group, to build low-cost mass housing projects in North and West India.

Although Warburg Pincus has been making investments in real estate for over 20 years, the firm closed its first dedicated global real estate fund in December 2006 after garnering $1.2 billion worth of commitments.