Mumbai: Emaar MGF, a 50:50 joint venture between the Dubai-based real-estate company, Emaar Properties, and India-based MGF Development, is planning to more than double its 10,000 acre land holdings to 25,000 acres in the next year.
“The land bank being amassed will be used for a variety of projects in residential, commercial, infrastructure, hospitality, retail and special economic zones,” said an Emaar MGF spokesperson.
The company is in talks with Reliance Retail, Bharti and the Aditya Birla Group to sign them up as preferred partners for retail spaces being developed. This will ensure that retailers planning a rapid expansion get adequate real estate to expand pan-India, and Emaar MGF gets prime anchor tenants for the malls it plans to develop, said analysts.
The new land will be acquired outside North India, converting Emaar MGF from a company with 70% holdings in that region to about 50% in a year’s time, said a senior company official, who did not want to be named.
Emaar MGF is currently evaluating properties in cities including Mumbai, Bangalore, Pune and Chennai. Emaar, which is building the world’s largest tower, Burj Dubai, has already invested $1 billion (Rs4,400 crore) in the joint venture, while three financial investors have invested another $51 million.
Aditya Birla director, finance, Sumant Sinha said, “The company is speaking to many mall developers, but I can’t comment on Emaar-specific details.” Reliance officials declined to comment, and Bharti officials said they were speaking to several developers, including Emaar.
While Reliance plans to invest more than $6 billion in the next five years to set up stores in 784 towns and cities, the Aditya Birla Group plans to invest about $3.5 billion over the next three-four years to open more than 6,000 retail outlets. Bharti-Wal-Mart is planning to invest $2-2.5 billion in retail and is looking for 10 million sq. ft of land by 2015.
Emaar MGF plans to dilute around 10% equity in an initial public offering later this year to raise cash for its expansion plans. This is important because its Dubai-based parent, too, has plans for rapid world-wide expansion. These will require massive financing, thus limiting its ability to entirely fund the JV’s plans. Emaar-MGF recently entered a 50:50 JV with French hospitality chain, Accor, to build and operate a chain of 100 budget hotels in India with an investment of $300 million.