Runwal group, CapitaLands in realty JV

At Rs 90 crore, the JV brings FDI into the city for the first time.

After a long wait, Mumbai has finally got its share of foreign direct investment (FDI) in real estate.

City-based Runwal Developers has tied up with one of Singapore's largest property companies, CapitaLands, for a joint venture residential project to bring in FDI worth Rs 90 crore.

While the initial investment by the company will be Rs 90 crore ($20 million), it is expected to pump in another Rs 45 crore once the project gets underway. The project, a 20-acre residential cum retail development, is being developed at Ghatkopar in the eastern suburbs.

The residential component of the project, 500 flats totalling 50,000 sqft, will be developed by the JV company, Runwal Capitalands as the first phase of the project.

The other components of the development - a 5 lakh sqft retail mall, 2 lakh sqft 5-star hotel complex and a multiplex - will be developed by the Runwal group.

"The total project cost has been pegged at Rs 450 crore. Of this 60 per cent will be equity and rest will be raised as debt," said Sandeep Runwal, director Runwal group. Another Rs 45 crore in FDI will also come in once the project gets underway, he added.

Capitalands' indirectly owned subsidiary Lonsvale Pvt Ltd, will hold a 49 per cent stake in the JV, with 51 per cent being held by the Indian promoters.

Capitalands, a $16.7 billion company with interests in real estate, hospitality and retail, has a presence in 17 countries across the world, including China.

The company, which also owns Raffles City development in Singapore, plans to enter the hospitality and retail sectors in the country.

"The respective subsidiaries were actively looking out for opportunities to enter these businesses in India. The company is looking for a return on investment of around 20 per cent from its current Indian investment. The residential project is expected to be completed in the next two years," said Soong Hee Sang, chief executive officer Residential (New Markets).