Chinese real estate developers China Fortune Land Development Co. Ltd (CFLD) and Country Garden are building up teams in key cities such as Mumbai and Gurgaon, and are close to forming local partnerships to enter the Indian real estate market, two people closely involved with the development said.
The Shanghai Stock Exchange-listed CFLD is looking to hire around 15 senior management personnel, including heads of real estate businesses (residential), regions, legal and strategy, to set up offices in Mumbai and Gurgaon, said the first person. Some senior managerial roles such as chief financial officer and head of human resource (HR) have already been filled, the person added.
“CFLD is setting up its entire team in India. Initially, they were running the process out of China. Now, they are doing it from Gurgaon where they have placed an HR head,” said the person.
CFLD did not respond to an email seeking confirmation.
In July, the company signed a memorandum of understanding with the Haryana government to develop industrial townships spread across 1,500 acres with a total investment of $5 billion. Two months later, it entered into an agreement with the City and Industrial Development Corporation (CIDCO), a Maharashtra government body, to develop integrated townships in Navi Mumbai.
Kisan Jawale, chief land survey officer at CIDCO, said CFLD has specified the size of land it wants to acquire and is in the process of identifying land in Navi Mumbai.
“They are looking at a few sites and once they identify land, we will move ahead to form a special purpose vehicle,” he said, adding that the partnership would be strictly between CIDCO and the Chinese company and not involve any third-party or local developer.
Similarly, Country Garden, which has a presence in countries such as Singapore, Malaysia and Australia, is aggressively scouting for opportunities to enter India, particularly through partnerships with local developers, said the second person cited above.
Email questions sent to Country Garden remained unanswered.
The Hong Kong stock exchange-listed company is in an advanced stage of discussions to partner with the Wadhwa Group for three to four residential projects in Mumbai, including an upcoming 450-acre township at Panvel, the person said.
Wadhwa Group confirmed that it is in touch with Country Garden.
The Guangdong-based company is also in the process of hiring three to four key managerial personnel, including an India business head. The firm will soon set up its first office in India at Mumbai’s Bandra Kurla Complex (BKC).
“We are in touch with the Country Garden team. They have finalized space in one of our commercial buildings. We are also in advanced discussions with them to form equity partnership for a few of our residential projects in Mumbai,” said Vrushank Mehta, head of corporate strategy and land acquisition, Wadhwa Group.
Hiring agencies and property advisers said unlike in other industries, putting a local team in place is crucial in real estate as it involves land acquisitions and regulatory approvals from local government bodies to start a project.
“This is one industry where you can’t have all the approvals in place before you set up a team. It is a very capital-intensive industry and a lot of regulatory aspects are involved around that. So, you need to have people on ground before you can actually go ahead with the plan,” said a hiring consultant on condition of anonymity.
Earlier this year, another leading Chinese real estate firm, Dalian Wanda, signed up with the Haryana government to build an industrial park with an investment of $10 billion.
Besides getting funds and investments, the Indian real estate market can benefit from Chinese developers who have experience of building large townships and mass housing, said Anshuman Magazine, chairman (India and South East Asia) at property consultant CBRE India. “There are few foreign developers which have many common things with India as far as real estate development is concerned. However, acquiring land and finding a local partner is the biggest challenge for foreign companies in India,” Magazine added.
Source: Live Mint