India Inc. at Digital Inspiration

Reliance Industries to setup a real estate fund for retail projects

Posted: 19 May 2008 03:02 AM CDT

Making its foray into real estate and hospitality sector to derive synergy from existing retail operations, Reliance Industries has setup a $1bn real estate fund with Vornado Realty Trust to develop malls and highway shopping centres in India.

The JV may also develop hotel projects on excess floor space on these retail projects. Reliance is also said to be in talks with Four Seasons Hotels and Accor for building hotels in Mumbai and Ahmedabad.

Reliance Industries earlier signed a deal with Nova Chemicals for developing eco-friendly retail buildings. The new real estate fund will have all real estate properties of Reliance Retail which is quite significant considering real estate and its management is the most strategic decision for any retail company.

Vornado has properties in Washington and New York and manages office, retail and merchandise mart. In US, Vornado has big tenants such as Wal-Mart, JC Penny and Macys'.

The JV will strengthen Reliance Retail's plans and give it much needed push to expand itself. The JV may even develop projects for other retailers and corporates too thus providing additional revenue stream for the trust. source

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