The Hindu Business Line : Realty cos opting for jt ventures with foreign players

Corporate - Alliances & Joint Ventures
Industry & Economy - Real Estate & Construction
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Realty cos opting for jt ventures with foreign players

S. Shanker

Mumbai, Sept 14

Niche segment realty players now appear to be eyeing the West for joint ventures to increase revenues and further their reach.

The most recent instance is Pune-based Marvel Realtors inking a Rs 500-crore pact with global asset management company, Och-Ziff Capital Management Group.

A 1.10 million sq ft residential super luxury project is to come up at Kharadi with facilities on offer to include exclusive swimming pools, spas in every apartment, extensive use of advanced home automation technology, Italian marble flooring and the latest central air conditioning systems.

Mr Vishwajeet Jhavar, Chief Executive Officer, Marvel Realtors, said the tie-up was a clean revenue sharing model and the partner would invest in land.

Catering to the high-end market where units come with price tags of no less than Rs 2 crore, Marvel has 17 projects in different stages of construction with a total development potential of 4.40 million sqft worth over Rs 2,000 crore. Over 15 to 20 per cent sale is to overseas clientele.

Others like Mumbai-based Garnet Constructions Ltd prefer to offload marketing rights also. Garnet has struck an exclusive global marketing alliance with Dubai-based Sternon Group for its 400-acre township, along the Mumbai-Pune Highway. The Sternon Group will invest about $3-4 million in the project that comprises IT, commercial and residential space, said Mr Arun Kumar Kedia, Director, Garnet Constructions.

With points of contact abroad and a strong client base in the US and Australia, Paranjape Schemes says joint ventures are purpose-oriented and add value to both the parties. Paranjape’s sales were always good and the company also had strong referral sales through its business associates.

Recent market sentiments have led to increase in activity for international marketing. It is by and large exploited for township projects and premium or luxury apartments catering to upper and high class, said Mr Sanjay Dutt, Deputy Managing Director, India, Cushman & Wakefield.

The opening of FDI in real estate in 2005 was meant to provide the much needed capital, introduce international investors to Indian real estate market and more importantly leverage on their global expertise. And, also for structuring, debt and development expertise through best architects and consultants further provide leveraging opportunity to tap global buyers whether corporate or NRI/HNI. Opportunity to work in India had obviously led to the obvious, reliance and leveraging of marketing channels. As a practice, this has been there for decades.

“We believe this is the first step towards several developers soon exploring and leveraging further and not just marketing but developing overseas. This is obvious as several developers have now built their organisational depth and possess the capability, which is further backed by the confidence of investors and clients,” he said.