The monster private-equity firm is kicking off a European property fund on the bet that tanking prices represent more of an opportunity than a catastrophe. But will the same thing work farther east?

Blackstone has made its first foray into Indian real estate with the acquisition of a stake in a project management company that it can use as a springboard for other investments.

The entry of Blackstone’s property unit comes amid a record year for private equity investment in India, in spite of the credit crisis. In the year to date, $2.1bn of deals have been struck, 136 per cent up on the same period last year, says Dealogic.

Blackstone’s venture will leave it paying $18m for a minority stake in Synergy Property Development Services, a project management and construction company in Bangalore.

Tuhin Parikh, managing director of Blackstone Real Estate India, said: “In India, there’s no shortage of land or capital but there’s a critical shortage of professional project managers.

“The key to getting large tenants is to be able to deliver on time.” India’s stock market has fallen sharply from its highs in January, forcing the country’s companies to accept more private equity investment to finance their ambitious expansion plans.

According to Dealogic, India leads China this year in terms of private equity deals in Asia, excluding Japan and Australia.

The largest Indian deal this year has been the $324m acquisition of a 13.8 per cent stake in the Akruti City development by Citi Venture Capital International and American International Group.

Blackstone has been one of the most aggressive foreign private equity firms in India, concluding five deals last year valued at about $800m. The Synergy investment is the first deal in India by Blackstone Real Estate Partners, its property unit.

Continue reading at FT.com

Next article » Nice Day For It

Previous article « RBS Mess