In a significant move, the Property Investment division of Citibank has recently allocated a hefty investment of one hundred sixty million dollars into the well-known real estate firm, BPTP. Previously, Citibank Property Investment (CPI) had made an initial investment of eighty million dollars, which enabled them to acquire a 5.89 percent stake in the company. The latest influx of capital will be channeled into a special purpose vehicle (SPV) under BPTP, dedicated to the execution of four special economic zones (SEZs) within the national capital region.
As per sources familiar with the matter, CPI is set to secure a substantial 40% stake in this SPV. The SPV's ambitious plans include establishing IT-specific SEZs across Noida, Greater Noida, Faridabad, and Gurgaon. Specifically, the Noida SEZ is being developed over a sprawling 25 acres, while Greater Noida is set to span 100 acres, Faridabad will cover 54 acres, and Gurgaon will utilize 27 acres of land. In its initial phase, the company aims to develop an impressive six million square feet across these four SEZs by 2010, contributing to a total planned area of 20 million square feet for development.
All four SEZs have successfully secured government approval, and the necessary land acquisitions have been completed. The funds generated by the SPV will be crucial in financing this expansive project.
It is noteworthy that while the government declined to extend tax benefits for software technology parks beyond March 31, 2009, IT SEZs have surged in popularity among export-oriented units. The developers involved in these SEZs will enjoy noteworthy tax concessions not just on their profits but also on any inputs essential for the project.
This deal underscores the ongoing vibrancy of the real estate sector in India, where investors appear eager to inject funds, especially when projects are in the implementation phase. A banker commented that, should India sustain an eight percent growth trajectory, the demand for real estate supply will be immense.