Sino Great Wall International Engineering Company Limited (SGW), headquartered at Beijing with a present market value of 3 billion dollars, has made foray into the Indian real estate market. The company provides engineering contractor services in China and offers international services to hotel, residential, public building, mechanical and electrical, curtain wall, decoration, and design projects. The company plans to invest close to 100 million dollars in the Indian market through a Joint Venture(JV) with Bengaluru-based real estate company Fortuna Group.
The entity has obtained the required Foreign Investment Promotion Board(FIPB) approval. The equity split of the Joint Venture will be 80 percent SGW and 20 percent Fortuna. The initial investment in the JV will be 50 million dollars. Another investment of a similar quantum will be made within the next 18 to 24 months. The JV will be headed by Neo Chia Wui, a Singapore national who has more than 30 years of experience in the real estate sector.
“We have already consolidated our position in China and are now aiming for an aggressive global expansion. We have formidable presence across the Middle East, Southeast Asia and Africa and are now eyeing India and South America. Though India is a new market for us, we see great potential for real estate development in the country. We feel that there has been a spurt in real estate development in India, not only from Tier I cities but across several Tier II cities as well,” said Chen Lue, SGW Board Chairman while announcing the joint venture in Bengaluru.
Through the JV, the Chinese company is also aiming to set up a hub in Bengaluru which will provide construction services and material to other construction majors in the country. Currently, the company has identified a couple of locations in Bengaluru to set up this hub and is expected to zero in on one of them soon. The hub is expected to be set up in around 45 acres of land in the next three to six months. “Depending on our success in the Bengaluru real estate market, we will be aiming to expand to other parts of the country. Our aim is to provide our technology know-how to reduce the time of construction and faster completion of real estate projects,” said Neo Chia Wui, who will be the CEO of this JV.
Interestingly, compared to SGW, the Bengaluru-based Fortuna Group is not a very large real estate player and has an annual revenue of about Rs 150 crores. The company has built over 1.5 million square feet of constructed area and has 1.2 milllion square feet under construction as on-going projects. “The real estate market is very sluggish right now, but we expect that it will pick up in the near future. Demonetisation is expected to bring in more transparency in the overall real estate sector in the country. Real estate development in India has been constrained with inadequate financing options. This was a major factor that delayed completion of most of the projects within stipulated time, which not only affected project viability but also put buyers into a quagmire. This joint venture is expected to address this and ensure on-time delivery of projects by stipulating project completion time frame,” said S.V. Rajesh Kumar, director, Fortuna Group.
