Where there is a will, there is a way.. you make a rule and the market forces finds a way around it.. see this interesting trend of overseas JV!!
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Realty cos scout for JV overseas : MAYUR SHEKHAR JHA & RAJAT GUHA
Source: Economic Time THURSDAY, JUNE 07, 2007

NEW DELHI: With almost all other routes for foreign investment in real estate blocked, the sector may witness a series of joint ventures between Indian and foreign developers. Prominent real estate companies including Unitech, Parsvnath and Omaxe are scouting for JV partners overseas.

DLF and Ansal API, which recently signed JVs with Dubai-based firms Nakheel and Deyaar respectively, are looking at more such deals. Some of the companies are in discussions with Australia-based real estate firm Leighton that has shown interest in the Indian market.

“A couple of deals are in the pipeline, aimed not only at the Indian market, but also international destinations. In the present regulatory scenario, a JV is the most amicable option,” says Ansal API marketing president Kunal Bannerjee. The company’s JV with Deyaar, the real estate subsidiary of Dubai Islamic Bank, is to develop a township here.

Through its joint venture with Nakheel, India’s largest real estate developer DLF is planning to invest $10 billion in two integrated townships spread across 40,000 acres.

One of the townships will be located in Gurgaon while Goa has been identified as the location for the other. In the past three weeks, top DLF representatives have been meeting real estate firms in Thailand, Singapore and Germany to explore alliances. Unitech MD Sanjay Chandra is also learnt to be looking out for partners in Hong Kong and Thailand.

Parsvnath Developers (PDL) is also exploring tie-ups with international partners. “We are open to foreign tie-ups. Talks, however, are in preliminary stages,” says PDL chairman Pradeep Jain.

Historically, Indian real estate companies do not prefer JVs. Till about a year ago, pre-IPO private placements used to be the preferred option to raise capital. With the government tightening the norms for sucn fund flows with lock-in provisions, developers are looking at other options.

Most real estate JV deals are likely to be styled in the form of special purpose vehicles (SPV), industry sources said. SPV arrangements are a win-win situation for both the partners as commitments are limited, Realty Verticals director Rajan Ahuja said.

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