New York-based private equity
fund AIG Global Real Estate
has bought out Bangalore-based developer RMZ Corp's 50% stake in their stalled joint venture mall project in Hyderabad, a person with knowledge of the development said.
"RMZ has exited its Rs 53-crore investment in the mall-cum-office project," the person said. "AIG now plans to set up a residential property on the 11-acre plot and is willing to put in additional capital for developing it."
The project will be launched by the first quarter of the next fiscal, subject to internal approvals, the person added. Bamasish Paul, managing director of AIG Global Real Estate's India operations, did not confirm the development, but RMZ's managing director Raj Menda said, "The dispute was settled amicably."
The deal closes a chapter of wrangling between the partners over whether the project should be residential or for mixed-use. The project, which was to be completed by early 2012, never came up, blocking AIG Global Real Estate
India Advisors' Rs 350-crore investment.
About four months ago, the AIG firm had served a legal notice to RMZ for failure to let it exit its investment in the project.
ET had reported in October last year that RMZ had sought $20 million from AIG as payment towards notional loss of profit for allowing it to exit the project. The person quoted earlier said AIG will build over 1,500 apartments, priced between Rs 50 lakh and Rs 60 lakh each, with a total out lay of Rs 1,000 crore.
According to property consultants, the residential sector in Hyderabad has bounced back after the slowdown and price correction of 2008.
"Total absorption in the Hyderabad property market
went up 14% to 4.06 million sq ft in the third quarter of current fiscal," according to a recent report by property research firm Liases Foras