Xander to buy Ozonegroup's retail and hotel project for Rs 350 crore

BANGALORE: Private equity firm Xander Group is acquiring a 1.2 million-sq ft retail and hotel project of real estate developer Ozonegroup for about 350 crore, a person familiar with the deal told ET.

Ozonegroup is backed by Urban Infrastructure Venture Capital Fund, which is led by Reliance Industries chairman Mukesh Ambani's close associate Anand Jain.

"Xander has purchased the FSI and has made the initial payment. The fund will pay a substantial amount at a later stage as the project needs some changes and is waiting for approval from the authorities concerned," said the person, who did not wish to be named. FSI refers to floor space index, or the ratio of the permissible built-up area to the total plot area, implying that Xander will pay only for the permissible built-up area.

Xander Group refused to comment on the transaction. "Xander does not comment on market speculation," the company's spokesperson said in an email statement. Ozonegroup could not be reached for comment.

The builder is developing a mixed-use project called Metrozone on a 42-acre plot in Chennai with eight million sq ft of office and residential space, and 1.2 million sq ft of retail and hotel project.

The company, which started operations in 2005, has a total of 15 million sq ft of projects in various stages of development.

Urban Infrastructure Opportunities Fund, managed by Urban Infrastructure Venture Capital Fund, and HDFC Property Fund, together hold 55% stake in the upcoming project through a special purpose vehicle, while the builder holds the rest.

Urban Infrastructure Opportunities Fund, which has Reliance Industries as its biggest investor, has invested 750 crore at the entity and project levels of the builder. HDFC Venture Capital Fund has invested 70 crore in the Chennai project.