Prominent Realty Players Chase Small Town Projects

June 28, 2007	(Be the first to rate this story!)  Loading ...
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Big players in Indian real estate are in a look out for Greenfield mall projects in smaller cities and towns to make large killings.  The list includes the prominent names of Unitech, Parsvnath, and Omaxe.

Unitech Limited has even earmarked a large amount of Rs 500 crore for a majority stake in a Greenfield retail project. The company may go in for a complete buy out in emerging metro cities such as Nagpur, Pune, and Indore. Real estate developers Omaxe and Parsvnath claim to be sitting on several proposals from local developers for such buy outs.

The construction companies have no issues regarding picking up majority or 100% stake in Greenfield mall projects in emerging cities. Indeed, it provides them with an added advantage, says Unitech managing director Sanjay Chandra.

Major developers will bring in their expertise and marketing skills to the project while facilitating easy access to capital. With the tight guidelines released by the Reserve Bank of India (RBI) on avenues to fund property projects, many local developers are taking the joint development route.

A number of small time property developers are also considering about joining hands with established developers. This renders local players an increased bargaining power while attracting consumer brands into those cities.

Parsvnath is considering picking up majority stake in a local project. Many industry executives consider it an offshoot of the consolidation in the industry. Contrary to this, many feel it to be more of a land acquisition strategy and not as any parameter to evaluate any forthcoming M&A trend.

The real M&A play in the retail mall space will begin in the next 6 to 12 months.  Land prices in smaller cities and towns are lower as compared to the prices available in metros.

Industry analysts feel that with major metros getting almost saturated in terms of the number of retail projects on the anvil, major developers are moving fast to extend their footprint to smaller cities and town.

News Published Under:   Real Estate India |

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