NRI Real Estate and Property Investment in India
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Indian Realty Firms take JV Route
Friday, June 08, 2007

The way out for cash-strapped real estate companies in the face of restrictions on foreign investors and external commercial borrowings now appears to be joint venture partnerships with overseas developers.

The trend for such ventures was set by MGF Developers who tied up with Emaar in December 2005 for a USD 4 billion investment.

DLF has concluded a deal on developing two townships with Nakheel of Dubai as a partner, while Ansal API has worked on a similar arrangement with Deyaar, the real estate subsidiary of Dubai Islamic Bank. Emaar MGF has further inked a deal with a subsidiary of the Australian construction and mining group Leighton Holdings.

More alliances are in the pipeline - DLF is tapping potential partners in Thailand, Singapore and G.ermany. Unitech and Parsvnath are also exploring partnerships with foreign developers.

The joint ventures the developers enter into would most probably follow the Special Purpose Vehicle format, which would ensure gains for both partners.

With foreign funding options closing down from every avenue - ECBs, pre-IPO placements and FDI in real estate - joint ventures appear to be a more secure alternative.

Related Readings

Ansal API Sign New Venture with Deyaar of Dubai
FDI in Real Estate in Indore
Fund Infusion into Pune Real Estate

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