The India unit of Dubai-based real estate developer Emaar Properties has signed a joint development agreement with Worldwide Resorts & Entertainment to develop a 73.60-acre land parcel in Gurgaon for Rs 278 crore, according to three people aware of the development.
This agreement was signed in June 2023 and was the third agrRevenue Sharingeement signed by Emaar India since December 2021.
In August 2022, Emaar India had entered into a joint development agreement (JDA) with Synergy Finhub for the development of a 17-acre land parcel, involving a consideration of Rs 345 crore. In December 2021, Emaar and Worldwide Resorts & Entertainment had signed a joint development agreement for a 119-acre land parcel for Rs 375 crore.
“In less than two years, Emaar has signed three JDAs with a minimum guarantee of Rs 1,000 crore. This will be a revenue-sharing agreement where the developer will handle construction and share 30% of the revenue with Emaar,” said a source.
ET has reviewed the land registration deeds for the three transactions.
Emaar India, Worldwide Resorts & Entertainment Pvt. Ltd and Synergy Finhub did not reply to ET’s email query.
As per the agreement copy, the new developer will remit an amount equal to 30% of their share of net sales to Emaar.
In a recent interview with ET, Mohamed Alabbar, founder of Emaar Properties, said that the company intends to increase its focus on India.
“I think hospitality in India has a great future as the supply and demand situation is very encouraging. Residentially, I don’t need to tell you that the demand in India has no limits. When it comes to the shopping mall business, India is just at the beginning. So, I believe that we should really focus on these sectors, and we should focus on the main cities of India,” Alabbar had said.
Emaar Properties, which entered India in 2005 with the largest FDI in the realty sector then, had invested about Rs 8,500 crore in the Indian real estate market through its joint venture Emaar MGF Land.
However, in April 2016, it decided to end this joint venture, and two months later, Shravan Gupta, the then executive vice chairman and managing director of the joint venture, resigned from the post. The demerger was finally approved in July 2018.
Currently, the former collaborators are engaged in a dispute, as the Dubai-based real estate developer has alleged fraud in the joint venture agreements and land transactions.
In November 2019, they lodged a petition with the National Company Law Tribunal (NCLT) requesting an investigation into these matters. They are also seeking compensation of Rs 2,400 crore through a bank guarantee to cover their losses. MGF has contested and denied all these accusations.
“We were a very young company when we came to India 20 years ago, and since then we have been learning. We made a mistake. We are not good partners because we do business differently. We do business long term. We don’t want to make money tomorrow, the day after, and sometimes you end up with partners who want to make money tomorrow morning,” said Alabbar.
Source : ET
