Realtors in NCR enter into joint ventures with financially strong developers
Property developers in the Delhi-NCR region are partnering large builders from the country’s South and West to restart projects, in the backdrop of a severe cash crunch, the stringent Real Estate Regulatory Act and the threat of being taken to the National Company Law Tribunal. Financially strong firms like Prestige Group, Godrej Properties and Kalpataru Group have entered into joint ventures, joint development and development management agreements in the country’s largest property market by volume. AJV or development management agreement puts alarge developer in the driver’s seat as the new entrant gains control of the new entity. Additionally, the established developer’s track record and ability to maintain cash flows help bolster project execution and marketing. “Local developers are unable to develop on their own and are under threat of being taken to the NCLT as buyers prefer corporate developers with better track record. Southern developers, who have better finances, are able to get good projects with lower risks as the local partner takes care of the permissions,” said Mudassir Zaidi, executive director (North), Knight Frank India. The Internal Rate of Return for projects has also halved to almost 18% over the last decade, he added.
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