EWDPL Seeks to Capitalize on Distressed Mall Acquisitions
Entertainment World Development (EWDPL), a prominent real estate developer, has expressed interest in acquiring malls from financially strained builders who are unlikely to complete their projects. This strategic move comes at a time when many of India's developers, including industry giants DLF and Unitech, have either deferred or slowed down their projects due to cash constraints.
Industry Landscape
- Approximately 60% of projects initiated by smaller developers are at risk of not being completed, largely attributed to retailers scaling back expansion plans, turbulent stock markets, and banks' cautious approach to lending for real estate ventures.
- Experts highlight this as a prime opportunity for distress sales of assets by smaller developers.
EWDPL's Strategic Outlook
- Quote from Manish Kalani, Managing Director, EWDPL:
“This is a time for distress sale of assets by small developers. This provides a great opportunity for us, as our company will be able to raise the funds from private equity.”
- Recent Funding: EWDPL successfully raised ₹1,300 crore from German real estate fund MPC Synergy, securing equity in the range of 10% – 49% across 21 projects.
- Strategic Partnership: Phoneix Mills, a key player in retail space development, acquired a 42% stake in EWDPL for ₹1,250 crore in February.
Expansion Plans
- Ambitious Target: EWDPL aims to establish itself as the country's largest mall developer by opening 50 malls by 2012.
- Upcoming Launches: Malls in Indore, Nanded, and Raipur are slated to open by the end of the current financial year.
- Focus on Tier-II and Tier-III Cities: EWDPL seeks to tap into the retail potential in smaller towns, an area largely overlooked by bigger developers who have primarily focused on metros and key IT hubs.
Market Insights from EWDPL’s Managing Director
- Retail Sector Growth: Despite the economic downturn, Kalani anticipates a 15% growth in the retail sector, which would have otherwise been between 20% – 25%.
- Early Mover Advantage:
“We reached small towns even before DLF and Unitech.”
- Innovative Approach: EWDPL’s introduction of the revenue-sharing model in India, now popular among retailers, positions them favorably in the market.
- Expertise in Mall Management: The current downturn is seen as an opportunity for developers like EWDPL, who bring expertise in mall management to the table.