Indian Retail Real Estate fund pegged at US $1-Billion

Indian Real Estate: Moolah Raising Tata Group

Joining hands with the Xander Group Inc., a private equity firm through its group company Trent earlier this month, the Tata group has firmed up plans to raise $ 1-billion for an institutional retail real estate fund.

Xander group, through one or more of its fund vehicles will invest in the development of an institutional retail real estate portfolio in India in partnership with high quality Indian developers. Tata Group’s real estate arm, Trent will anchor tenancy rights and participate with Xander in managing the portfolio and monitoring its growth.

The Tata group is not alone, but quite in line with other big retail players like the Future group that controls retail company Pantaloon Retail and has floated two real estate funds, specifically for the retail sector. And, has prompted the Aditya Birla group to also consider floating a real estate for fuelling its own retail growth.

Xander Real Estate Partners, part of the Xander group, have also recently bought a 20% stake in a Reliance Industries and the Maker Group joint venture, to develop commercial, residential and retail real estate.

Organised retail, which currently accounts for only 3% of the $230-billion (Rs. 9, 40,000-crore) is expected to grow phenomenally at 45-55 %, creating a demand for around 220-million sq. ft. of retail space by 2010. Little wonder then, the Tata group known for its rather aggressive business moves will make a big bang entry into the development of such space.

Industry estimates confirm the organised retail space currently available is only around 27-million sq. ft. Another 90-million sq. ft. is expected to be added by 2008 from 263-mall projects of which 18-million sq. ft. each in Delhi and Mumbai, 9.5-million sq. ft. in Ludhiana, 6-million sq. ft. in Chandigarh and 3.6-million sq. ft. in Ahmedabad.

Source: www.ibef.org