EWDPL eyes cash crunch-hit mall projects

Entertainment World Development (EWDPL), a real estate developer, said it plans to acquire malls from cash-strapped builders who are unlikely to finish their projects and may be scouting for a partner.

EWDPL’s move comes at a time when most of the country's developers have either deferred or slowed down their projects. DLF and Unitech, two of the country’s largest developers, have recently announced plans to defer or sell some of its projects for want of cash.

As many as 60 per cent of the projects embarked upon by small developers are not likely to be completed as retailers cut back on their expansion plans, stock markets tumble and banks curb lending to real estate projects, experts said.

''This is a time for distress sale of assets by small developers,’’ said Manish Kalani, managing director, EWDPL. ''This provides a great opportunity for us, as our company will be able to raise the funds from private equity.’’

EWDPL recently raised Rs 1,300 crore from a German real estate fund, MPC Synergy, by selling equity in the range of 10 to 49 per cent in 21 projects. In February this year, Phoneix Mills, which is also in the business of retail space development, bought a 42 per cent stake in EWDPL for Rs 1250 crore.

EWDPL plans to open 50 malls by 2012 that will make them the biggest mall developer of the country. By the end of this financial year, the company will open malls in Indore, Nanded, and Raipur.

EWDPL plans to tap the retail potential in the tier-II and tier-III cities as big developers have focused mainly in the metros and other key information technology-linked hubs of the country. The growth in smaller towns was largely untapped.

Talking to Business Standard, Kalani said even at the time of economic downturn the retail sector will grow by 15 per cent, which otherwise would have grown by 20-25 per cent.

"We reached small towns even before DLF and Unitech," added Kalani.

''This downturn will help developers like us who also have expertise in mall management. We were the first ones to introduce the revenue sharing model in the country which has becoming so popular among the retailers today," said Kalani.