BIG Realty Funds to join Budding Realtors

July 17, 2007	(Be the first to rate this story!)  Loading ...
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Earlier, the commercial real estate in India had been on the upswing in the wake of high proliferation of IT companies. Now, the land is getting scarce in larger cities. This has forced major retail players to look out for other innovative strategies.

Subsidiary companies of real estate companies like Mukesh Ambani’s Reliance Property, Kishore Biyani’s real estate fund Kshitij, Sunil Mittal’s Bharti Realty and Ashok Piramal group’s Peninsula Realty Fund, are holding discussions with different real estate firms to enter into joint venture to develop retail projects on the developers’ existing land.

Most retail projects involve retailers floating special purpose vehicle (SPV) in a JV to develop exclusive shopping malls. Real estate partner will bring land for development of the retail project which is then valued followed by working out equity sharing.

Once the project will be executed properly, the retailer would hold a major portion of the mall while leasing the remaining. The move will save the time as well as efforts of these companies.

Kshitij Investment Advisory has recently taken up a similar retail project in Hyderabad.  The company has been looking at similar SPVs with real estate firms for its properties, informs Shishir Baijal, head of Kshitij Investment.

Going by the JV route will be highly beneficial for small real estate companies which have good land bank but lack in capital, says Rajan Ahuja, director of Delhi based brokerage firm Realty Verticals.

News Published Under:   Real Estate India |

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