Mumbai: Real estate major Unitech Ltd has agreed to sell 50 per cent stake in the first phase of a Mumbai project to Lehman Brothers Real Estate Partners for Rs760 crore ($175 million).

Unitech, along with a local partner in the Western Expressway JV, is developing one million sq ft of office space in Bandra-Kurla complex, in central Mumbai, in the initial phase of the project.

Lehman Brothers Real Estate Partners and Western Expressway JV will now contribute 50 per cent each of the project cost.

The project is for about 18 million sq ft development which would take eight-nine years to develop. Lehman is putting in Rs760 crore of capital in the initial one million sq ft, with commitment towards further cooperation over time.

New Delhi-based Unitech owns 50 per cent of the entire 18 million sq ft project and the total value of the project is little over Rs13,000 crore.

Unitech, which entered the Mumbai market late last year, said the project included residential, retail and hotel units.

The move comes in the aftermath of a failed IPO plan in which Unitech expected to raise $700 million for its real estate investment trust in the Singapore market.

While raising capital in the market has become difficult with tight money conditions and a hike in bank lending rates, there is no dearth of  private equity and debt.

There is enough capital available for the larger companies, although at a higher cost.

Unitech shares, which were hammered on Friday, rose as much as 4.6 per cent to Rs195.80 following the news.

The deal is the latest in a series of private equity transactions by

Real estate companies, hit by rising cost of funds and falling company valuations, are increasingly looking to private equity funds for raising money for property development.

Office rentals in the area, among the prime business districts in Mumbai, currently range around Rs350 per square foot per month.

In April, rival Parsvnath Developers sold 30 per cent in a 500,000 sq ft commercial project nearby to two foreign funds for Rs186 crore.