RMZ group to invest $7 bn in 5 yrs to develop realty projects worth $25 bn

New Delhi, Nov 22 (PTI) Realty firm RMZ Corporation on Wednesday said it will invest a massive USD 7 billion as equity over the next five years to develop office, residential, warehousing, hospitality and mixed-use projects worth USD 25 billion across major cities as it sees huge growth opportunities in Indian real estate.

Bengaluru-based RMZ, which is privately owned by the Menda brothers, has been primarily in the development of Grade-A office complexes, and it has now decided to diversify into other segments of real estate.

The company unveiled its plan for transition into an alternate asset owner and also announced the appointment of Arshdeep Sethi as President of RMZ Real Estate to spearhead this ambitious growth plan.

'We will invest USD 7 billion equity to create assets worth USD 25 billion in the next five years by diversifying its portfolio across various real estate businesses,' Sethi told PTI.

He said the equity investment will be funded through internal accruals and also by setting up of investment platform with large global institutional investors.

'The USD 7 billion equity investments will be primarily for acquiring land for creating these assets as well as providing for 30-35 per cent equity in each real estate project to develop real estate projects,' Sethi said.

RMZ Corporation has appointed Chief Executive Officers (CEOs) for its various asset classes -- Thirumal Govindraj, CEO of RMZ Office; Avnish Singh, CEO of RMZ Mixed Use; Saandip Kundu, CEO of RMZ Living (ultra-luxury residential offering); AvinashSule, CEO of RMZ Industrial & Logistics; and RMZ Hospitality.

The company plans to expand its rent-yielding real estate business to USD 40 billion by 2029 from the current USD 15 billion.

'This strategic transformation underscores the family's unwavering commitment to growth and expansion within alternate investment classes. We are deeply focused on investing in high-growth opportunities across geographies that lay the foundations for a sustainable global economy,' Raj and Manoj Menda, Chairs of the Supervisory Board of RMZ Corporation, said.

With the assistance of our second generation, Sidharth and Mihir, RMZ Corporation is positioned to become amongst the world's largest family-owned alternate asset owners in the next five years, they added.

An executive board, comprising non-family senior leaders from diverse industry backgrounds, oversees each of the firm's businesses.

'India's potential to generate USD 1 trillion in diversified assets over the next 8-10 years is on the horizon, and our objective is to be visionary leaders who fully seize this exceptional opportunity,' Sidharth and Mihir Menda said.

Elaborating more, Sethi said the company is in talks to acquire land to develop real estate projects, mostly outright. It could also do joint development agreements (JDAs) with landowners.

RMZ Corporation will focus on six major cities -- Bengaluru, Hyderabad, Chennai, Mumbai, Gurugram and Pune.

For residential business, the focus would be initially on two cities -- Mumbai and Gurugram -- where demand and prices of luxury housing are high.

Over the next five years, RMZ Corporation targets to develop another 50 million square feet of office assets worth USD 10.4 billion. It already has 10 million square feet of completed and 20 million square feet of ongoing office buildings.

In the mixed-use segment, the plan is to develop 15 million square feet of area worth USD 8 billion.

RMZ plans to develop 62 million square feet of industrial & warehousing space worth USD 3.6 billion. The company is looking at building more than 10 hotels across various cities, including Pune and Goa. These hospitality projects would be worth USD 3.1 billion.

In the residential segment, the company is targeting USD 0.6 billion in annualised sales by 2029.

'We have great confidence in the India growth story and are committed to annually adding rent-yielding real estate around USD 5 billion to our portfolio, alongside annualised sales of USD 0.6 billion in luxury residential in 2029,' Sethi said.

In December 2020, RMZ Corporation completed the sale of its large commercial portfolio to Brookfield for USD 2 billion. RMZ had sold 12.8 million square feet in area.

In 2021, the group tied up with Canada Pension Plan Investment Board (CPPIB) to develop office complexes in Chennai and Hyderabad. The CPPIB will invest USD 210 million in the joint venture. PTI MJH SHW