Chinese realty firms’ India investment plans hit by uncertainty
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.