After ending its 11-year-old joint venture in India, Dubai-based Emaar Properties is now planning to take the joint development route to monetise its land parcels and support its future growth in the country.
The management of Emaar has in fact gone back to the drawing board to work on multiple options to prepare the next phase of its India strategy, including joint development agreements and new launches.
Emaar India has a total land bank of 6,000 acres across the country, part of which has been used to develop 55 projects with a total saleable area of 43 million sq ft. Of these 6,000 acres, nearly 70% of Emaar’s land bank is in the Delhi-National Capital Region and the rest is spread over Mohali, Lucknow, Jaipur, Kochi, Mysore, Chennai & Mangalore.
Earlier this month, the National Company Law Tribunal (NCLT) approved the proposed demerger scheme of Emaar MGF Land, allowing both the partners — Emaar Properties and India’s MGF Development – to function separately.
Fresh from the demerger, Emaar India is looking to leverage its land bank, where immediate development projects are not on, to raise funds for future expansion. The company is looking beyond completing its delayed projects by 2018-19 for which it had already arranged ₹2,500 crore.
“We are adequately funded at the moment as we had recently raised ₹2,500 crore. This money is being used to complete all the ongoing projects. There would also be funds that would be coming through internal accruals as also some of the non-core assets could be monetised. Going forward, we are also open to partnering with local players for joint development of project,” said Sanjay Malhotra, CEO, Emaar India.
A joint development arrangement would also provide Emaar with fresh funds that it can then use to launch new projects beyond March 2019 by when it aims to deliver all its existing projects. The developer is working towards delivering most of its ongoing projects by March 2019. It has received occupation certificate (OC) for 4,758 units since June 2016, and it expects to receive the same for over 5,500 units by March 2019. In order to achieve its target of delivering these projects, the firm is spending ₹80-100 crore per month on construction.
Funds raised thus far are being used towards construction and development of existing projects with the target of earliest deliveries and also for repayment of high-cost debt. economictimes