Provogue India Ltd's real estate arm, Prozone, and UK-based mall property developers Liberty International PLC have joined hands to develop and manage prime regional shopping centres in India.
According to the agreement, Liberty International will have a 25 per cent stake in the JV that will operate under the name Prozone-Liberty. The JV will focus on developing mall properties across Tier 2 cities in India.
The company is planning to initially build six large-scale malls in cities like Surat, Aurangabad, Mysore and Indore. "We are still freezing on the remaining two cities," Provogue's Managing Director Nikhil Chaturvedi said during a media briefing.
The whole project is slated to cost about Rs 1,000 crore. "We would be raising Rs 390 crore through equity and the rest through debt," Chaturvedi said.
Liberty International would be investing Rs 202.5 crore of the Rs 390 crore to be raised through equity.
Speaking on the JV, Sir Robert Finch, Chairman of Liberty International said, "India's organised retail market is growing and Prozone is well positioned to benefit from this expansion of the Indian retail market."
Liberty International would be appointing its CEO David Fischel and Director John Abel as board members of the new JV.
"Our partnership with Liberty is financial as well as strategic," Chaturvedi said, adding, "we would be having at least a 50 per cent stake in all the properties developed by us."
The company is projecting a pay-back time of about 54 months on each property developed by them and the investments, will be spread out in a phased manner over the next three years Chaturvedi said.
Liberty International is a UK-based property company with property investments of over 7.5 billion pounds of which regional shopping centres amount to 85 per cent. The group owns nine of the top 25 malls in the UK and this is their first foray into the Asian market.