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Reliance Industries Limited (RIL), India’s largest public company, has entered into a joint venture with New York-based Vornado Realty Trust, a real estate investment firm. Under the equal JV, each partner will commit up to $250 million to acquire, develop and operate retail shopping centers across key cities in India. The shopping centers will contain 500,000 to 1,000,000 or more sq ft and typically be anchored by a hypermarket to be owned and operated by Reliance. Reliance currently operates over 700 retail stores in multiple formats in India.

Reliance was searching for a real estate manager for developing an asset base and had initiated talks with several international players, including US-based Taubman Centre and NYSE-listed Real Estate Investment Trust (REIT).

RIL has been aggressively scouting for joint ventures since in retail it has decided on the partnership model for growth. It has already signed JVs with Marks & Spencer, Vision Express, Miss Sixty and Office Depot. Reliance was also reported to be in talks with the Canada-based Four Seasons Hotels and French group Accor to set up hotels at some of its properties in Mumbai and Ahmedabad.

Vornado, the $14-billion market capitalisation company, develops and manages retail properties and office spaces in Washington and New York. Vornado has been quite active in India. It has a 50 per cent stake in the 263 acre IT Park in Gurgaon being developed by Uppal Group. The total investment in the project is expected to be Rs 5,000 crore and Vonado is jointly financing the project.

It has also signed an MoU with the Maharashtra Government to develop a $200 million IT township. Vornado also has a partnership in India Property Fund, which is a $600 million fund it runs in association with The Chatterjee Group and invests in office and mixed-use development throughout India.

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