i Develop Stocks Advisory

Realty firms marry construction cos to beat financial blues

There maybe a slowdown in the real-estate sector, but joint ventures between real estate majors and construction companies are still going strong. Timely delivery, cost saving and a competitive edge in the market is making many realtors think of such alliances. Realty companies such as Omaxe and Indiabulls Real Estate are tying up with construction majors, following in the footsteps of biggies such as Ansal API, Emaar MGF and DLF. And some like Uppal Group have tied up with another real estate developer, Chadha Group, for specific projects. As per global real estate consultancy, Jones Lang LaSalle Meghraj (JLLM), some developers are giving turnkey contracts to construction companies to benefit from the lower at which construction companies can raise money from banks. “If developers try to raise finance from banks on their own, they would normally incur a borrowing cost of around 14-15%, whereas a construction company would be able to raise funding at lower rates, depending on various factors.”