Published On:April 9 2008
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Sistema to develop mixed use real estate in Gurgaon
Gurgaon: The $16 billion (Rs 64,000 crore) Sistema, Russia’s largest private sector consumer services company with interests in telecom, real estate and banking, will develop a mixed-use real estate project in Gurgaon to cater to the rising demand for office space, residential and hotels in the National Capital Region.
The project, in partnership with the Shyam Group (Sistema’s partner for telecom services in India), will be developed on a 22-acre area located on the national highway that passes through the boomtown of Gurgaon.
The investment in the project is likely to be around $200 million (Rs 800 crore). The company has also identified land on the outskirts of Mumbai for a real estate project.
This is the first investment made by a Russian company in the Indian real estate market, which has seen an unprecedented rise in prices on the back of strong demand fuelled by a booming economy.
Sistema, in partnership with Shyam, has bagged nationwide mobile licenses and was recently allotted spectrum for the services.
“The Gurgaon project is likely to start by end 2008 or beginning of 2009,” said Sergey Shmakov, first vice-president, Sistema Hals, the real estate and construction subsidiary of the Sistema Group.
Construction will take place on 16 acres and the remaining six acre will be held free. Land will be provided by the Shyam Group for the project. The partners’ stake will be worked out soon.
The project will have commercial office space, some residential properties and perhaps a hotel too. It will incorporate Indian architecture and is likely to be ready before the Commonwealth Games in 2010.
“We will start the project as soon as possible, as Shyam has commitments to the Haryana Urban Development Authority,” said Yevgeny A Kolodkin, vice-president, strategy and business development, Sistema Hals.
Sistema is looking at Indian real estate market in a big way and plans to develop properties in all metros including Delhi, Mumbai, Kolkata and ctities such as Gurgaon, Noida, Faridabad and Pune. “We are considering all possibilities that market can provide us in India,” Shmakov said.
The real estate venture in India, which will either be a separate real estate arm or part of Sistema itself, will be its first exposure outside of CIS (Russia and Ukraine).
“The Indian market is similar to the Russian market. There is a lot of demand for commercial office space in India,” added Kolodkin.
On the lines of Sistema’s strategy in Russia, the company will rent out office space and sell residential properties in India.
Besides Shyam, Sistema is also negotiating with other companies in India for developing real estate projects. The company is also looking at the Chinese market, besides India.
Sistema Hals is listed on the London Stock Exchange and has a market capitalisation of $1.7 billion. The Sistema group has a market capitalisation of $16 billion with a turnover of $9.6 billion in January-September 2007.