Reliance ropes in overseas realty firms for hotel chain

19 May 2008

Close on the heels of the announcement of the Anil Ambani Group's Hollywood venture, Reliance Industries led by brother Mukesh has signed a $1-billion joint venture with US-based real estate firm Vornado Realty Trust to enter the real estate and hospitality sectors in India.

The joint venture between Reliance Retail Ltd (RRL) and the New York-listed firm will develop a network of mega malls and highway shopping centres across the country – both for itself and for others.

Having entered consumer retail and special economic zones in the last two years, the diversified group, is likely to set hotels across all categories - luxury, business and budget – as a natural an extension of its retail business.

Reliance has also been exploring tie-ups with Canada-based Four Seasons Hotels and French group Accor to set up hotels at some of its properties in Mumbai and Ahmedabad, reports quoting RRL sources said.

Taking a leaf from the success story of motels run by Gujarati Patels in the US, Reliance had, early this year, started over 100 company-owned fastfood joints along the highways that form the 5,846-km Golden Quadrilateral and the north-south/east-west corridor.

Reliance, which had over 1,400 petrol pumps along these stretches  had, however, to close all of them as it was unable to face up to competition from the heavily subsidised sale of auto fuel by state-run oil marketing companies.