Emaar, MGF to part ways

Dubai-based realty firm Emaar Properties and India’s MGF Developm-ent have decided to end their 11-year-old joint venture through demerger of Emaar MGF Land Ltd into two separate entities.

Emaar Properties, which entered India in 2005 with largest FDI in the realty sector, has invested about Rs 8,500 crore in Indian real estate market through its JV firm Emaar MGF.

The two partners held about 49 per cent stake each in the joint venture firm and the rest by financial institutions. The JV has currently a land bank of around 8,000 acres and 53 ongoing residential and commercial projects.

“This reorganisation will enable Emaar to implement the focused strategy for its real estate business in India and will allow the business to undertake future expansion strategies,” Emaar Properties said.

Although both Emaar Properties and the JV firm Emaar MGF did not clearly stated in their regulatory filings, sources said the two main partners have agreed to part ways.

“The joint venture will be demerged into two separate entities. This is being done to facilitate capital in the company and delivery of the projects,” a senior company official associated with the process said.

The projects and land bank would be divided between the two partners, sources said. When contacted Emaar MGF spokesperson declined to comment on the issue.

There have been speculations in the market about their separation in the last few years. How-ever, Emaar Properties had in July last year termed India as a key market and said it was committed to the success of its projects in the country through its joint venture firm Emaar MGF Land.