Dubai’s Emaar plans to sell hotels and non-core assets in India
MUMBAI: Dubai’s Emaar Properties PJSC, which built the emirate’s iconic BurjKhalifa tower, is planning to sell several non-core assets inIndiaincludinglandand ahotel, said threepeopleawareof the development. The developer now plans to focus on its premium projects and expand on its owninIndiafollowingitsseparation from local partner MGF DevelopmentsLtd. Thecompany hasalreadystartedtheprocessof selling its 90-roomFortuneSelect hotel in Jaipur, said the first of the three persons. It is also lookingtosell 10-15landparcelsonthe outskirts of cities including Mumbai, Delhi and Chennai, which were acquired to build hotels and for other commercial development. Emaar has hired property consultant CBREIndia to sell the hotel and land assets, the people cited above said on condition of anonymity.“Emaar is exiting fromsomeoftheirnoncore assets as it plans to go on its ownnow. Mostofthemareatland stage which they bought for development but it never hap- pened,” said the second person, addingthatthestrategyisaligned 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
EMAAR ENTERED INDIA IN 2005 BY INVESTING RS8,500 CRORE IN A JOINT VENTURE WITH MGF DEVELOPMENTS
whodidnotwanttobeidentified. Emaar Properties and CBRE didn’t respond to email queries.
EmaarenteredIndiain2005by 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.
In2016, the companiesdecided to part ways. In January, the NationalCompanyLawTribunal approvedtheproposeddemerger schemeofEmaarMGFLandLtd, allowing bothcompaniestooperate separately. A 2 April Press Trust of India report said Emaar Properties has appointed its existing chief strategy officer HadiBadriasmanagingdirector 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, saidthereport. Manyotherdevelopers such as Supertech Ltd and AlphaCorp Pvt. Ltd are selling assets suchashotelsandmallsto raise funds to repay debt or finance existing projects.
“Overaperiodoftime, because of the lack of liquidity and stressed balance sheet, the ave- nue of fundraising has almost dried up. Oneofthewaystomanage liquidity by developers is to sell some non-core assets like land parcels or completed assets whichareyieldgenerating,” said ShashankJain, 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 bankoutside the city where premiumdevelopmentisnotpossible, then it may focus on core areas which command a premium, he added.