Chinese Construction major SGW forays into India through Joint Venture with Bengaluru-based Fortuna Group
Chinese construction major SGW today announced its foray into Indian Real Estate market through a Joint Venture with Bengaluru-based Fortuna Group. SGW's initial investment in the Joint Venture will be US $ 50 million and will bring in similar investment within the next 18 to 24 months.
- (1888PressRelease) December 03, 2016 - Beijing Headquartered Sino Great Wall International Engineering Co., Ltd. (SGW), the Shenzen listed international public company for general contracting engineering with present market value of US $ 3 billion, today announced its foray into India through a joint venture with Bengaluru-based Fortuna Group to develop Real Estate projects across the country.
SGW Fortuna the joint venture entity has obtained Foreign Investment Promotion Board approval and the JV's equity split will be 80 % SGW and 20 % Fortuna. SGW's initial investment will be US $ 50 million in the JV and will bring in similar investment within the next 18 to 24 months. SGW Fortuna will be headquartered in Bengaluru and start its real estate operations from here and in a phased manner go pan-India.
Addressing a press conference in Bengaluru today, Mr. Chen Lue, SGW Board Chairman, said, "Having consolidated our position in China and emerging as the leading stock of 'One Belt and One Road' initiative, SGW is aggressively looking at expanding globally. Upon building a formidable presence across Middle East, Southeast Asia & African countries. SGW is now eyeing India and South America."
Amongst various regions globally, we see great potential for real estate development in India and what excites SGW is the prospects of spurt in real estate development not only in Tier I cities but the mega opportunity across several Tier II cities, Mr. Chen Lue, pointed out. We feel this is the most opportune time to foray into India and SGW Fortuna is keen to redraw the Indian real estate landscape through innovative technology, eco-friendly designs / green projects and contemporary project, Mr. Chen Lue added.
Also SGW Fortuna announced that Mr. Neo Chia Wui, a Singapore national with over 30 years of experience in real estate development, has been appointed the CEO of SGW Fortuna. To be based out of Bengaluru, Mr. Neo Chia Wui is mandated to drive the business keeping international best practices as a benchmark and at the same time cater to ethos of Indian customers. It may be recollected that Mr. Neo Chia Wui has had a successful stint in India and handled prestigious projects in India including Bengaluru.
Commenting on the joint venture initiative, Mr. S.V. Rajesh Kumar, Director, Fortuna Group, said, "Real estate development in India has been constrained with inadequate financing options and also high cost of funds. This was a major factor that delayed completion of most of the projects within stipulated time, which not only affected project viability but also put buyers into a quagmire. This joint venture is expected to address this and the primary mandate is 'on-time delivery of projects' by stipulating project completion time frame in the S & P agreement."
Further, Mr. S.V. Rajesh Kumar said, SGW Fortuna is all set to change the market dynamics of Indian real estate industry with its commitment to "Build to Sell" unlike the current practice of "Sell to Build". This in our view will be a game changer. Also, he added, SGW Fortuna approach will help customers not only save their real estate cost but also help them to save rental income as they could move to their dream property in a pre-determined time frame. According to Mr. S.V. Rajesh Kumar, SGW Fortuna will focus on multi asset development that are relevant to respective markets and the first project will come up in North Bengaluru.
Commenting on the synergy which SGW will bring to this joint venture, Mr. Chen Lue pointed out, SGW Fortuna will follow the best of international practices in real estate development and also leverage SGW's structural engineering, design capabilities and construction materials sourcing strategies. This is expected to offer SGW Fortuna a cutting edge in driving down project costs and thereby make its projects affordable & attractive and this coupled with on-time delivery could make SGW Fortuna Group a preferred one in the market.
Even as SGW expands across different regions globally either through its own subsidiary or through Joint Venture route, the management is looking at gradually acquiring overseas engineering companies & architecture firms in different countries including USA, Japan, Europe, Southeast Asia, Middle East, North & South American countries. Further, SGW is in merger & acquisition talks with several companies globally and though India is not in its radar at this point of time did not rule out acquisition in the coming years, Mr. Chen Lue added.
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