New Delhi: The Anil Ambani-led Reliance Group and China’s leading developer, Wanda, announced a joint venture agreement to do real estate projects in the country. This will cover integrated township projects in India, including commercial buildings and residential apartments, hotels and retail space. This is the first time a Chinese real estate company is investing in India, according to sector analysts, though some Hong Kong-based developers have funded Indian projects.
The two signed a memorandum of understanding to set up a joint venture (JV) for a strategic long-term partnership covering several areas of mutual interest, the Reliance Group said. Among the first real estate projects of the JV will be in Navi Mumbai and Hyderabad.
The 135-acre Dhirubhai Ambani Knowledge City in Navi Mumbai, owned by Reliance Communications, has a development potential of 10 million square feet (sq ft), subject to necessary approvals.
The Hyderabad project is an 80-acre new business district owned by Reliance Infrastructure, having an unlimited floor-space index for development for commercial and residential purposes, hotels, etc. There are plans to develop up to 10 million sq ft area here in a phased manner.
“Over the past few years, the Reliance Group has become the single largest trading partner between India and China”, said Anil Ambani. He added the company was looking to extend the strategic partnership to the Wanda Group “in a manner that will tremendously benefit both, and unlock substantial value for millions of all our stakeholders”.
Since Wanda Group is also the leading multiplex player in the world, with a little over 6,000 screens, Reliance MediaWorks will explore a possible co-operation in the multiplexes business in India and the US. Earlier this year, Wanda acquired the AMC chain in the US for $2.6 billion (Rs 14,000 crore).
The JV is expected to be signed in a few weeks. Investment figures will be revealed then.
Reliance will bring in the land parcels and Wanda its expertise in construction and development.
Experts called the tie-up with a Chinese company a good move. “India should welcome funds. China is the second-largest economy and has huge surplus to invest”, said Anshuman Magazine, CMD, CB Richard Ellis, South Asia.
Magazine said India must diversify its sources of funds. “If we can accept funds from the US, why not from China? There shouldn’t be a bias”.
Wanda Group has built 130 million sq ft properties in 66 integrated projects across 50 cities in China and 38 five-star hotels.
“Wanda is very excited about the opportunities in the Indian market,” said Wang Jianlin, chairman, Wanda Group. “By joining our strengths, we hope our cooperation will bring mutual benefits and great results,” he added.
Dalian Wanda Group was founded in 1988 and operates across commercial properties, luxury hotels, tourism investment, cultural industry, and department store chains.
Earlier this year, Ambani’s Realiance Communications borrowed $1.18 billion from China’s lenders to repay its holders of foreign bonds. Reliance Power also tied up loans of $ 1.1 billion (over Rs 6,000 crore) from three Chinese lenders for its 3,960 MW Sasan ultra mega power project in Madhya Pradesh.
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