Dubai’s Emaar plans to sell hotels and non-core assets in India
EMAAR ENTERED INDIA IN 2005 BY INVESTING RS8,500 CRORE IN A JOINT VENTURE WITH MGF DEVELOPMENTS
MUMBAI: Dubai’s Emaar Properties PJSC, which built the emirate’s iconic Burj Khalifa tower, is planning to sell several non-core assets in India including land and a hotel, said three people aware of the development. The developer now plans to focus on its premium projects and expand on its own in India following its separation from local partner MGF Developments Ltd. The company has already started the process of selling its 90- room Fortune Select hotel in Jaipur, said the first of the three persons. It is also looking to sell10-15 land parcels on the outskirts of cities including Mumbai, Delhi and Chennai, which were acquired to build hotels and for other commercial development. Emaar has hired property consultant CB RE India to sell the hotel and land assets, the people cited above said on condition of anonymity .“Em a ar is exiting from some of their noncore assets as it plans togo on its own now. Most of them are at land stage which they bought for development but it never hap- pened,” said the second person, adding that the strategy is aligned with its plan to focus on luxury residential development in big cities. While the value of its land assets could not be ascertained, the hotel is likely to fetch around Rs90-100 crore, said an official who did not want to be identified. Emaar Properties and CBRE didn’t respond to email queries.
Em a ar entered India in 2005 by investing Rs8,500 crore in a joint venture with MGF Developments, making it one of the largest foreign direct investments in the country’s real estate sector.
In 2016, the companies decided to part ways. In January, the National Company Law Tribunal approved the proposed de merger scheme of Em a ar MG FL and Ltd, allowing both companies to operate separately. A 2 April Press Trust of India report said Emaar Properties has appointed its existing chief strategy officer Ha di B adria sm an aging director of its India business. The company has around 5,000 acres and has raised debt to fund housing projects in Gurugram, Jaipur, Lucknow, Mohali and Chennai, said the report. Many other developers such as Super tech Ltd and AlphaCorp Pvt. Ltd are selling assets such as hotels and malls to raise funds to repay debt or finance existing projects.
“Over a period of time, because of the lack of liquidity and stressed balance sheet, the ave- nue of fundraising has almost dried up. One of the ways to manage liquidity by developers is to sell some non-core assets like land parcels or completed assets which are yield generating ,” said S has hank Jain, partner( transaction services) at PwC India, a research and consultancy firm.
Emaar Properties has been known for developing premium residential projects andif it hasa land bank outside the city where premium development is not possible, then it may focus on core areas which command a premium, he added.