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Goldman Sachs Invests $150 Million In Piramal Realty

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In tandem with this investment, Piramal Realty announced it will launch a unique buy-back guarantee called ‘Piramal Assurance, Gurbir Singh writes

Global investment bank Goldman Sachs will invest US$ 150 million (Rs 900 crore) for an undisclosed minority stake in Piramal Realty, the real estate development arm of the Piramal Group. The funds will be used to expand Piramal Realty’s current real estate portfolio and acquire prime properties in and around Mumbai, the company said in a statement. 
Anand Piramal, Executive Director of the Piramal Group, said: “As one of the leading investors in global real estate, Goldman Sachs has helped develop some of the world’s finest buildings, such as 15 Central Park West in New York and 16 Colleyers Quay in Singapore.  Their experience and expertise will help us to build world-class projects in India.”
In tandem with this investment, Piramal Realty announced it will launch a unique buy-back guarantee called ‘Piramal Assurance.’ Under the scheme, the company will offer to buy back any residential unit from a customer at a 5 percent discount to the market value until possession should a buyer not be satisfied with the product.  
This is expected to help the company rope in early buyers at the time of launch of its projects, and provide a hedge in case prices move southwards. Stung by delayed and incomplete housing projects, new customers are wary of buying into projects which are just starting or at early stages of construction. However, in the present recessionary scenario it is not known whether the carrot of an exit at 5 percent below market rate will be attractive enough to rope in buyers. 
Anand Piramal commented, "Our ‘Assurance’ will reduce the financial risk of purchase and provide peace of mind for customers, who will know that their investment is safe and liquid. This also will set high performance expectations for our team and will compel us to keep our customers happy and at the centre of our business."
Founded in 2011, Piramal Realty claims to have over 10 million square feet of commercial and residential projects under development in prime areas of Mumbai, such as Byculla, BKC, Mulund, Thane and Worli. In the next few months, Piramal Realty will launch Piramal Vaikunth in Thane, a mixed-use complex designed by well-known firm, HOK. The project will feature high-rises, townhouses, a spiritual learning centre, and retail outlets all spread over 34 acres.
Goldman Sachs since 2006 has deployed more than U$2.5 billion in India.  Globally, Goldman Sachs is one of the largest real estate investors in the world and has invested approximately $43 billion in the sector.  Working with numerous renowned developers, such as Hines, Lincoln Property and Zeckendorf Development, Goldman Sachs has been involved in various landmark developments around the world, including 56 Leonard Street and MoMA Expansion Tower (53W53) in New York. 

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