News: Sumitomo announces $2 billion real estate project with Krishna Group-23.02.2018

Sumitomo announces $2 billion real estate project with Krishna Group

NEW DELHI: Japanese conglomerate Sumitomo Corporation has formed a joint venture with Indian auto components major Krishna Group to develop real estate projects across India. With this, the $40-billion company is foraying into Indian real estate sector.

The joint venture, Krisumi Corporation's first project will be an 18 million sq ft development in Gurgaon with cost in excess of $2 billion. Both the partners will hold 50:50 stake in this joint venture.

ET was first to report that the Tokyo-based company is foraying into Indian real estate through a joint venture.

The joint entity to be known as Krisumi Corporation will develop large scale real estate projects across India beginning with ‘Krisumi City’, an 18-million sq ft development. This maiden project of Krisumi Corporation, in which both the partners will hold equal stake, will be developed with a cost of over $2 billion.

According to Masahiro Narikiyo of Sumitomo Corporation, India’s real estate sector is going through an interesting phase. While consumer’s expectations have evolved manifold, most of the traditional developers are finding it extremely difficult to effectively cater to all their requirements.

“In this backdrop, we believe that there is a huge vacuum for quality housing backed by a name that the buyers can trust. Which is why, we are extremely excited about this new venture with our partner, Krishna Group, which we believe embodies all the qualities that are required to succeed in today’s environment,” he said while adding that Sumitomo may enter into more such alliances in India later on.

The project will be spread over 65 acre in sector 36 A, Gurugram, abutting the Delhi - Mumbai Industrial Corridor’s Global City.

“The biggest challenge facing the Indian real estate industry today is with regard to quality, efficiency and commitment to timelines, all of which is exactly what Japan is known for. We are certain that our partner, Sumitomo Corporation, part of the 400 year old Sumitomo Group, with their extensive Global experience in real estate development shall contribute tremendously in creating projects with endearing value for our clients as well as the local communities around it,” said Ashok Kapur, Chairman, Krishna Group.

The entire 18-million-sq-ft project will be developed in 7-8 phases over the 10 years. While the first phase with 1.2 million sq ft development will have over 450 apartments, entire project will offer around 5,000 apartments.

The joint venture company has secured majority of approvals for the first phase, which will be launched later this year. The construction of first phase of the project is also expected to commence this year.

The master plan and architectural design of Krisumi City has been developed by Japanese design firm NIKKEN SEKKEI, the name behind the famed Tokyo Sky Tree. The project will have high-rise residential options across various sizes and budget segments, along with a high-end retail mall, a super-premium five-star hotel, education institutions, and office spaces.

International real estate developers, especially Chinese developers such as Wanda Group, have been showing interest in Indian real estate. Most of these companies are interested in building large-scale projects across the country.

Sumitomo Corporation’s construction and real estate business is one of the largest investors, developers and managers of residential, retail and office properties and large-scale mixed-use urban redevelopment projects in Japan.