Tata group pegs retail real estate fund at US$ 1 billion
The Financial Express — April 30, 2007

The Tata group, which joined hands with private equity firm the Xander group Inc through its group company Trent earlier this month, has firmed up plans to raise $1 billion for an institutional retail real estate fund.

Xander group, through one or more of its fund vehicles, will invest in the development of an institutional retail real estate portfolio in India in partnership with high quality Indian developers.

Trent will have anchor tenancy rights and will participate with Xander in the management of such portfolio and its growth.

The Tata group’s move is in line with other big retail players like the Future group, which controls retail company Pantaloon Retail. The Future group has floated two real estate funds specifically for the retail sector. The Aditya Birla group is also considering floating a real estate fuel its retail growth.

Xander Real Estate Partners, part of the Xander group, has also recently bought a 20% stake in a joint venture between Reliance Industries and the Maker Group, to develop commercial, residential and retail real estate.

Organised retail, which currently accounts for only 3% of the $230 billion (Rs 9,40,000 crore) is expected to grow phenomenally at 45-55 %. This is expected to create a demand for around 220 million square feet of retail space by 2010. Little wonder then, that the Tata group which has been rather aggressive in most of its business will make a big bang entry into the development of such space.

According to industry estimates, the organised retail space currently available is only around 27 million square feet.

Another 90 million square feet is expected to be added by 2008 from 263 mall projects of which 18 million square feet each in Delhi and Mumbai, 9.5 million square feet in Ludhiana, 6 million square feet in Chandigarh and 3.6 million square feet in Ahmedabad.