RIL sets up $1 b realty fund with US biggie Vornado
Source: The Economic Times
Co Also In Talks With Canada's Four Seasons & France's Accor To Set Up Hotels
Chaitali Chakravarty & Boby Kurian
NEW DELHI/BANGALORE
I N WHAT could be mark the beginning of Reliance Industries' foray into real estate and hospitality, the Indian conglomerate has sealed a Si-billion joint venture with the New York Stock Exchange-listed Vornado Realty Trust to set up a real estate fund that will develop a network of mega malls and highway shopping centres in India, not just for Reliance Retail (RRL) but also for others. Reliance is also in talks with the Canada-based Four Seasons Hotels and French group Accor to set up hotels at some of its properties in Mumbai and Ahmedabad. The RRL spokesperson, however, declined to comment.
The joint venture with Vornado (ET reported about the two being in exploratory talks in February) is Reliance's fifth global partnership in three months�the other four being with Marks & Spencer, Vision Express, Miss Sixty and Office Depot. However, the latest partnership is seen as important as it would deal with real estate acquisition and management, crucial for the viability of any retail company. Most retailers are bleeding because they have acquired properties mindlessly to cash in on the consumer boom. While some like RRL and AV Birla Group have the staying power, others want quick returns, which are dearly not coming through.
Meanwhile, a source said the group's big buck real estate foray may also see it tapping a synergistic foray into hospitality. "The group is looking at the possibility of setting up hotels to take advantage of the excess floor space index (real estate space) available at some of its existing properties," a source explained. But it is leamt that the group has not yet tak-en a final call on the hospitality project given the vastly different skill sets required for the same.
At Mumbai's Bandra-Kurla complex (BKC), Reliance is developing an integrated project, including corporate office, shopping mall and five-star hotels, on a 2 5 -acre plot. However, it is not clear whether the real estate joint venture with Vornado would extend to hotel projects even though the US realty major has an asset like Hotel Pennsylvania in its portfolio.
Reliance, averse to global partnerships in the past, has now adopted a more pragmatic approach to form joint ventures with the world's best to capitalise on their domain expertise and brand power. Since the group is a green horn in retail and has never dealt with a consumer business on such a large scale, it wants to learn the systems and processes from experienced global companies so that it can apply them on its own retail venture.
Co Also In Talks With Canada's Four Seasons & France's Accor To Set Up Hotels
Chaitali Chakravarty & Boby Kurian
NEW DELHI/BANGALORE
I N WHAT could be mark the beginning of Reliance Industries' foray into real estate and hospitality, the Indian conglomerate has sealed a Si-billion joint venture with the New York Stock Exchange-listed Vornado Realty Trust to set up a real estate fund that will develop a network of mega malls and highway shopping centres in India, not just for Reliance Retail (RRL) but also for others. Reliance is also in talks with the Canada-based Four Seasons Hotels and French group Accor to set up hotels at some of its properties in Mumbai and Ahmedabad. The RRL spokesperson, however, declined to comment.
The joint venture with Vornado (ET reported about the two being in exploratory talks in February) is Reliance's fifth global partnership in three months�the other four being with Marks & Spencer, Vision Express, Miss Sixty and Office Depot. However, the latest partnership is seen as important as it would deal with real estate acquisition and management, crucial for the viability of any retail company. Most retailers are bleeding because they have acquired properties mindlessly to cash in on the consumer boom. While some like RRL and AV Birla Group have the staying power, others want quick returns, which are dearly not coming through.
Meanwhile, a source said the group's big buck real estate foray may also see it tapping a synergistic foray into hospitality. "The group is looking at the possibility of setting up hotels to take advantage of the excess floor space index (real estate space) available at some of its existing properties," a source explained. But it is leamt that the group has not yet tak-en a final call on the hospitality project given the vastly different skill sets required for the same.
At Mumbai's Bandra-Kurla complex (BKC), Reliance is developing an integrated project, including corporate office, shopping mall and five-star hotels, on a 2 5 -acre plot. However, it is not clear whether the real estate joint venture with Vornado would extend to hotel projects even though the US realty major has an asset like Hotel Pennsylvania in its portfolio.
Reliance, averse to global partnerships in the past, has now adopted a more pragmatic approach to form joint ventures with the world's best to capitalise on their domain expertise and brand power. Since the group is a green horn in retail and has never dealt with a consumer business on such a large scale, it wants to learn the systems and processes from experienced global companies so that it can apply them on its own retail venture.
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