Warbug Pincus, Runwal form JV to build malls, commit $200 mn each

21/05/2019

Mumbai: Mumbai-based property developer Runwal Group has formed a joint venture with an affiliate of global private equity firm Warburg Pinc to create a retail mall platform.
Both partners will commit $200 million each in the form of equity and would raise another $600 million in the form of debt to create a corpus of $1 billion, to invest in and develop high quality shopping malls across tier 1, 2, and 3 cities in India which have a sizeable population and growing disposable incomes, a release from the JV said.
This strategic partnership is founded on a shared vision to create India’s pre-eminent retail mall platform which will benefit from the country’s rapidly growing retail sector at a time when mall penetration across Indian cities is still very low. The platform will look to build large destination malls as well as smaller hypermarket and cinema-anchored community malls. Retail malls in several countries around the world have transformed from pure shopping areas into social, community and entertainment centers, it said.
Runwal Group already operates four malls in Mumbai with a total leasable area of approximately 2 million sqft. This includes its flagship R-City mall in Ghatkopar which has a total leasable area of 1.2 million sqft. The platform will be seeded with several pipeline projects that are currently under development and will also have the option of acquiring some of Runwal Group’s operational retail malls. Going forward, the platform would look to acquire both greenfield as well as brownfield projects. The platform would have a best-in-class management team led by Sanjay Dube who will join as the CEO.
Sanjay was most recently the CEO of Landmark Hospitality (part of Landmark Group), prior to which he led Unilever’s operations in Central and Eastern Europe.
Following Warburg Pincus’ successful partnerships in the retail mall space in China, Vietnam and Indonesia, with entities such as Red Star Macalline, Vincom Retail and NWP Retail, this investment represents the first mall platform which the firm has backed in India.
Commenting on the formation of the JV, Sandeep Runwal, managing director of Runwal group said, “We are delighted to partner with Warburg Pincus in this exciting new business opportunity. The retail real estate sector is expected to see tremendous growth going forward driven by lack of community spaces in Indian cities and the growing disposable income resulting in greater spend on entertainment and branded retail. We look forward to working closely with Warburg Pincus and leveraging their successful experience in helping create market leading platforms in the retail mall space in other parts of Asia. We are confident that under the leadership of the management team led by Sanjay Dube, the new platform will become one of the leading mall developers in India”.

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