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    KSL getting started on mall development

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    Having created a niche for itself in the industry as a vertically integrated textile player in the business of spinning, knitting, processing and garmenting, and Industries Limited has recently diversified its portfolio by entering the realty business through its 100 per cent subsidiary, Reward Retail Estate Company Limited. The company has commenced major development projects at six locations in India, with plans to develop nine additional properties within the next three years.

    Commenting on the foray, , chairman, KSL and Industries Limited, said, “During the textile phase, the company kept on acquiring large fiscal assets. In the process, the company also acquired the Empress Mills at Nagpur and various other properties within the city limits. We later realised the potential of these lands and that is when we decided to develop real estate.”

    Further, “We wanted to venture into real estate as this industry looks very promising for at least the next 20-25 years. Since we already have land, our investment is not much. Now we are also acquiring land and developing new properties at the same time.”

    The flagship project of the company will be at Nagpur at the Empress Mills Land and it will be called Empress City, to be followed by Deccan City project in Kolhapur. Tayal said, “Nagpur is our flagship property and will have residential buildings and a shopping mall that will be the largest in central India, a luxury mall, an IT park and a five-star hotel in association with . The shopping mall is designed by Hafeez Contractor and constructed by the .”

    Funding for all the projects will be through internal accruals and the Nagpur property is expected to be launched at an investment of Rs 180 crore. Post-Nagpur, there will be malls at Kolhapur, Vapi and Silvassa. Commenting on why the concentration is on tier II cities, Tayal explained, “In tier II cities the real estate charges are lower as compared to the metros; and since the prices of banded goods remain the same, there is a better margin to be earned. In metros we have started in a small way and are in the process of acquiring lands as well.”

    The group is taking necessary steps to reduce the CAM charges by taking into consideration some system improvements like setting up of vapour absorption machines (VAM) for recycling of the hot air generated by ACs, thus bringing in considerable reduction in the electricity charges, which according to Tayal constitute about 60-70 per cent of the overall charges that a retailer pays.

    – Zainab Morbiwala, Mumbai Bureau