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Fosun Invests 800 cr with Ahuja Constructions in Malad and Chembur

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It’s a first realty deal in India by a Chinese Group, and they have majority stake in a property development sector which has been formed with realty developer Ahuja Constructions for 800 crore. This investment would be taken forward as well with regards to the development. 

Fosun Invests 800 cr with Ahuja Constructions in Malad and Chembur

The deal also assumes significance since it is a pure equity transaction and the group plans to invest up to 2,500 crore into this new entity over the next 3 years.

Chinese property majors including Wanda Group, Country Garden, China Fortune Land Development Co (CFLD), and Fosun Group have been actively eyeing opportunities in India over the past couple of years. However, they have not been able make headway due to the inability to get access to their preferred large-size projects and other issues.

“Out of a total 800 crore, Fosun will invest 400 crore in the first tranche in this platform for ongoing operations and two new acquisitions in Mumbai’s Malad and Chembur locality,” said one of the persons mentioned above. “The joint platform would raise finances through sales, and if necessary, debt.”

With this alliance, Fosun and Ahuja Constructions will work on an expanded business philosophy by creating new business verticals such as offices, retail, logistics apart from existing residential development. The new entity is also looking to take advantage of the ongoing sluggish business environment in the real estate sector and has aggressive plans to acquire projects in the next 8-12 months.

“Ahuja Constructions’ expertise in slum rehabilitation and affordable housing projects apart from society redevelopments and land acquisition has proved to be a solid appeal for Fosun to conclude this deal,” said the second person mentioned above.

Fosun has been working on its plan to gain a toehold in India’s real estate for some time now and has been looking for a partner with expertise in these areas. The Shanghai-headquartered company is making this investment through its real estate arm Fosun Hive.

A part from the Mumbai property market, Fosun is also looking at such acquisition and alliance opportunities in Bengaluru and the National Capital Region (NCR).

Ahuja Constructions is bringing its large affordable housing and slum rehabilitation projects into this platform. The company has 10 million sq ft space under construction across total seven projects including large projects in Bhiwadi and Ambernath near Mumbai, prominent city-centric and suburban space projects in Mumbai’s Worli, Pali Hill, Sion, Oshiwara and Malad areas.

Fosun Group is amongst China’s largest privately-owned investment conglomerates with interests across pharmaceuticals, real estate, financial services, infrastructure and hospitality and it has formed such platforms in Japan, South America and Europe. In one of the biggest acquisitions in India, Fosun Group had picked up controlling stake in Hyderabad-based Gland Pharma in 2017 for over $1 billion.

(The story has been published from a wire feed without any modifications to the text)

Source :ET

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