News: Biyani buys Crossroads

(TT 23/03/2006) Mumbai - Mumbai’s oldest mall might have a new owner soon.

According to sources, the Kishore Biyani-led Pantaloon Group has picked up a controlling stake in the Crossroads mall at a deal estimated at around Rs 200 crore.

Biyani is the lead buyer in a consortium that could consist of foreign buyers also, sources said.

Biyani, however, said, “We are not confirming it (the deal).”

The 1.5 lakh-sq-feet Crossroads mall at Tardeo in Central Mumbai could be a strategic buy for the Pantaloon group since it has a real estate venture fund called Kshitij Venture Capital.

The mall was facing problems after several retail outlets were opened at Phoenix Mills nearby.

There had been an upward pressure on the rentals while the footfalls had not gone up commensurately.

To maintain the profitability of a mall, rentals should not cross 12 per cent of the gross revenue.

If the common area maintenance is high and footfalls low, the above balance cannot be maintained.

Rajeev Piramal, vice-chairman of Morarjee Realties, which owns the mall, however, said, “We are exploring options and no decision has been taken as yet.”

Biyani could be looking at converting Crossroads into a boutique mall dedicated to electronic or consumer durables.

The Investment Advisory, which is a wholly-owned subsidiary of the Pantaloon Group, recently floated two retail real estate venture funds, Kshitij and Horizon International Fund.

The funds are planning to invest in malls across the country.

Pantaloon plans to set up 51 malls by 2008

The realty division of the Piramal group came to Urvi Piramal, Rajeev’s mother, after an amicable division among family members. Urvi also received Morarjee Gokuldas Mills.

At present, the real estate is managed by Rajeev, who belongs to the second generation of Piramals.