Chi­nese realty firms’ In­dia in­vest­ment plans hit by un­cer­tainty

HT Estates - - FRONT PAGE - Bidya Sa­pam & Mad­hurima Nandy

MUM­BAI/BEN­GALURU Two years af­ter an­nounc­ing­grand­plans­for In­dia, lead­ing Chi­nese de­vel­op­ers Coun­try Gar­den, Dalian Wan­daandChi­naFor­tuneLand Devel­op­ment(CFLD) are star­ing at un­cer­tainty.

Hong Kong Stock Ex­change­listed Coun­try Gar­den, which opened sev­eral of­fices across In­dia, has cut staff by more than half, aper­son­aware­ofthe­mat­ter said on con­di­tion of anonymity. Sev­er­al­topChi­ne­se­of­fi­cial­shave left and its Pune and Hy­der­abad of­fices have­been­closed, the of­fi­cial said on­con­di­tion of anonymity. Prop­er­ty­con­sul­tants­said the in­abil­ity to find large­pro­ject­sand chal­lenges of deal­ing with lo­cal bod­ies have de­layed their plans. Be­sides, theChi­ne­segov­ern­ment re­cent­ly­curbed­out­bound­in­vest­ments in sec­tors like real es­tate.

“About a year ago, Coun­try Gar­den had nearly 300 peo­ple, in­clud­ingChi­nese, in­In­dia. Now, it is less than half. There­are­only bare min­i­mum peo­ple in each of its ex­ist­ing of­fices,” said the of­fi­cial cited above. Of­fices in Mum­bai, Ben­galuru and Gu­ru­gram are still op­er­a­tional.

Coun­try Gar­den was in ad­vanced talks with builders suchasWad­hwaGroupandCen­tury Real Es­tate Hold­ings Ltd, and­had even signed termsheets with­landown­er­sand­lo­calde­vel­op­ers. “Apart from a sin­gle joint ven­ture deal in Mum­bai, noneof the deals have taken off,” said a per­son fa­mil­iar with the mat­ter.

Email­queries sent to Coun­try Gar­de­nandWad­hwaGroup­were not an­swered. Dalian Wanda, which an­nounced $10 bil­lion in­vest­ment in In­dia, and Shang­hai-stock ex­change listed CFLD are yet to find their first projects in In­dia. Both­had­made­sep­a­rate agree­ments with Haryana gov­ern­ment in 2016 to build large town­ships and in­dus­trial parks.

Email queries to Wanda and CFLD re­mained unan­swered.

“It is dif­fi­cult to sign largescale projects. First lan­dis priced high and­funds­don’t comecheap in In­dia,” said Ra­jeev Tal­war, chief ex­ec­u­tive­of­fi­cer (CEO) DLF Ltd, which held talks with of­fi­cials of Wanda group in 2015. “It was only a fa­mil­iar­iza­tion meet­ing­fa­cil­i­tated bythe­gov­ern­ment of In­dia. We haven’t heard any­thing from them af­ter that,” he said. Twotrans­ac­tion­sin­volv­ing Fo­sun Group are also stuck be­cause of Chi­nese re­stric­tions. The­com­pa­ny­was­clos­e­to­buy­ing 51% stake in Ben­galuru-based Nitesh Es­tates for ₹800 crore. It was also close to sign­ing a deal with Ahuja Con­struc­tions in Mum­baifor₹350 crore. “Thedeal with Nitesh was al­most done. Now, it seem­sitwill take an­other twom­onth­safter­whichit­should get con­cluded,” said a per­son fa­mil­iar with the devel­op­ment.

“The ini­tial eu­pho­ria among Chi­nese de­vel­op­ers has died down. Tight­en­ing of norms for cap­i­tal in­vest­ment by the Chi­ne­segov­ern­men­thasaf­fect­ed­not just in­vest­ments in In­dia but their global ex­pan­sion plans,” said Shob­hitA­gar­wal, man­ag­ing di­rec­tor andCEO, Anarock­Cap­i­tal. Me­dia re­ports have said that Chi­na­has­start­ed­tar­get­ing“ir­ra­tional deals” of­ten in­volv­ing ho­tels, sports clubs and­cin­e­mas af­ter out­bound in­vest­ment in 2016 hit all time high of $170 bil­lion, caus­ing the value of yuanto slump and lead­ing to mas­sive cap­i­tal out­flow.

Apurva Muthalia, man­ag­ing di­rec­tor, Fo­sun Prop­erty Hold­ings (In­dia) and Gau­tam Ahuja, man­ag­ing di­rec­tor, Ahuja Con­truc­tions did not re­spond to text mes­sages and calls.

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