Art

Hafeez Contractor may offload 74% for $150 mn

Hafeez Contractor, involved with several landmark real estate developments, is looking at offloading a majority stake in his eponymous and India’s largest architectural design firm, sources said. The Mumbai-based architect is discussing the possibility of divesting up to 74% stake with private equity funds at an enterprise valuation topping $150 million.

The earliest foreign investor in the domestic real estate sector, India Real Estate Opportunities (IREO) fund, is among the potential suitors that have had discussions with the architectural design firm, sources added. The firm has been in talks with potential suitors for a while, but the deal time-line may get stretched following the ongoing market turmoil as private equity industry is seen with-holding investments amidst unprecedented developments in the financial sector.

When contacted, Hafeez Contractor declined to comment saying he would not confirm or deny it. An email query pertaining to a possible stake sale in the company remained unanswered.
The 58-year-old Contractor is not working on a family succession to take forward the professionally-run firm, and his plans to divest a significant stake must be seen in the context, sources added. The 25-year-old firm has around 350 staff including 26 senior associates, and annualized revenue reportedly in the region of Rs 200 crore.

India’s realty giant DLF is a significant client, sources said. The firm’s portfolio includes residential developments, corporate offices, shopping malls, townships, airports, urban planning and civic redevelopment projects. Hiranandani Gardens in Mumbai, the sprawling Global Education Centre campus of tech giant Infosys in Mysore, AV Birla Group Headquarters, Akruti Centre Point in Mumbai are just some of the developments that part of the architecture firm’s portfolio.

In recent months, private equity majors have inked at least two significant investments in real estate related services. Blackstone cut a deal with Bangalore headquartered Synergy Property Development Services, while Baring Asia acquired interest in another city-based firm, RSP Architects.

Funds with large exposure to real estate and infrastructure sector have been on the look out for synergistic investments in allied services, which would give them integrated management capabilities. Amongst the reported suitors for Hafeez Contractor firm, IREO has committed approximately $2 billion in various projects in India after starting operations in 2004. It is learnt that IREO, with eight offices, has over 19 developments across diverse geographies focused on residential, office, retail and hospitality projects.

Original article here.

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