The global real estate fund of Morgan Stanley is in talks with Mumbai-based Sheth Developers to invest $100 million to $125 million in a residential project in India's financial capital, three sources with direct knowledge of the matter said.
The Morgan Stanley fund will invest in the unlisted Indian firm's project in the western suburbs of Mumbai, said the sources, who declined to be named as they were not authorised to speak to the media.
Morgan Stanley declined to comment and Sheth Developers did not return phone calls seeking comment.
Sheth Developers acquired an 18-acre land parcel in Andheri from Borosil Glass Works in 2010 for about 8.75 billion rupees ($165 million) and plans to develop a large residential project there, said the sources.
If completed, the investment would be the first in India by the Morgan Stanley fund in three years, two of the sources said. The fund has invested about $750 million so far in India.
In October, sources told Reuters that a bunch of investors including a fund managed by Morgan Stanley and the Government of Singapore Investment Corp are in separate talks to buy a Mumbai property from Indian textiles firm Alok Industries for about $200 million.
Last month, the Wall Street bank named Shirish Godbole as the head of its global real estate investment fund in India.
Indian developers have come under pressure over the past year as rising interest rates deter residential buyers and funding for builders becomes scarce as economic growth slows.
Private equity investment in Indian real estate was marginally down in the first nine months of 2011 to about $784 million, from $817 million at the same time last year, according to data from industry tracker VCCircle.com.
