Overseas crackdown: China's realty projects in India are in deep trouble

The proposed projects of Chinese property developers in India are in limbo after a clampdown by the Chinese government on their overseas investments.

In August last year, China laid down rules restricting overseas investments, stepping up its campaign against what it described as “irrational” acquisitions of assets in industries ranging from real estate to hotels and entertainment.

A handful of Chinese companies such as Country Garden, Wanda Group, China Fortune Land Development Co (CFLD), and Fosun were actively perusing business opportunities India until last year.

In 2016, CFLD signed a memorandum of understanding (MoU) with the Navi Mumbai planning authority, Cidco, to build townships. CFLD was also looking to build townships and city infrastructure in other parts of Maharashtra. 

When contacted, Cidco Vice-Chairman and Managing Director Bhushan Gagrani said, “CFLD has not shown any interest after signing the MoU. In fact, we wrote to them but have not received any communication from them.”

Another Chinese developer, Hong Kong stock exchange-listed Country Garden, was in an advanced stage of discussions with the Wadhwa Group to pick up stakes in three to four residential projects in Mumbai, including an upcoming 450-acre township at Panvel. It was also in talks with other Indian developers for real estate projects.

“Country Garden’s talks with Wadhwa are on the back burner after the clampdown by the Chinese government. But they are still working on the project in terms of legal titles, design,” said a source in the know. Country Garden has also built a team of professionals for its Indian projects, according to sources.

An e-mail sent to Country Garden seeking comment did not elicit any response, while Wadhwa Group spokesperson declined to comment on the matter.

“(Chinese) real estate companies are yet to get an approval from the government to put money in overseas markets,” said a senior real estate consultant, who did not want to be named as he is working with some of the Chinese companies.

Sources also said the reported deal between Chinese investor Fosun and Bengaluru-based developer Nitesh Estates was not happening, though it could not be independently verified. Fosun was looking to invest $125 million and pick up a stake in Nitesh, according to recent reports. An e-mail sent to Fosun went unanswered.

Earlier, Chinese conglomerate Dalian Wanda Group’s project with the Haryana government got stuck due to differences over equity sharing. Wanda did not want to give more than 9 per cent share to the state government, while the latter wanted 26 per cent in the project. Wanda planned to invest $10 billion in the construction of five industrial and theme parks, besides shopping malls.

Initial Moves

• In 2016, CFLD signed an MoU with  Cidco to build townships in Navi Mumbai
• CFLD was also looking to build townships and city infrastructure in Maharashtra
• Another Chinese property developer, Country Garden, was in talks with Wadhwa Group to pick up a stake in its Panvel project; it was also eyeing other projects in the country 
• Dalian Wanda Group's project with the Haryana government was stuck due to differences over equity sharing 

Source: Reports