RELIANCE JV

MUMBAI - 21 June 2008 - RELIANCE INDUSTRIES SEALS $1-BILLION JOINT VENTURE WITH THE NEW YORK STOCK EXCHANGE-LISTED VORNADO REALTY TRUST.

In what could mark its foray into the real estate and hospitality sectors, Reliance Industries has sealed a $1-billion joint venture with the New York Stock Exchange-listed Vornado Realty Trust to set up a real estate fund that will develop a network of mega malls and highway shopping centres in India, not just for Reliance Retail (RRL) but also others. Reliance is also in talks with the Canada-based Four Seasons Hotels and French group Accor to set up hotels at some of its properties in Mumbai and Ahmedabad. The RRL spokesperson, however, declined to comment.

The joint venture with Vornado (ET had reported in February that the two were in exploratory talks) is Reliance's fifth global partnership in three months' the other four being with Marks & Spencer, Vision Express, Miss Sixty and Office Depot. However, the latest partnership is important as it would deal with real estate acquisition and management, which is crucial for the viability of any retail company. Most retailers are bleeding because they have acquired properties mindlessly to cash in on the consumer boom. While some like RRL and AV Birla Group have the staying power, others want quick returns, which are clearly not coming through.

Meanwhile, a source said the group's bigbuck real estate foray may also see it tapping a synergistic foray into hospitality. The group is looking at the possibility of setting up hotels to take advantage of the excess floor space index (real estate space) available at some of its existing properties, a source explained. But it is learnt that the group has not yet taken a final call on the hospitality project, given the vastly different skill sets required for the same.
At Mumbai's Bandra-Kurla Complex, Reliance is developing an integrated project, including corporate offices, shopping mall and five-star hotels, on a 25-acre plot. From Helplinelaw.com

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