Provogue India managing director Nikhil Chaturvedi with Robert Finch, chairman of Liberty International, in Mumbai on Monday. (Fotocorp)

Mumbai, Oct. 16: In a bid to capture a slice of the boom in the organised retail market, Provogue (India) Ltd, the fashion brand maker, has entered into a joint venture agreement with Liberty International of the UK to develop and manage prime regional shopping centres.

While Rs 1000 crore will be invested to develop malls in six centres in the country, under the agreement, Liberty International will be picking up a 25 per cent stake in Prozone Enterprises, the company's wholly owned retail infrastructure subsidiary, subject to the approval of the Foreign Investment Promotion Board.

Based on current projections, Liberty International's equity contribution in respect of these six centres will be of at Rs 202.5 crore (approximately £25 million).

Liberty International is a UK FTSE 100 listed property company, with property investments of over £7.5 billion, of which regional shopping centres amount to 85 per cent. They are one of the world's largest such groups and own 9 of the top 25 shopping centres in the UK.

Provogue managing director Nikhil Chaturvedi told newspersons today that the Rs 1000-crore investment will be funded by a mix of equity and debt.

The shopping centres to be developed by Prozone-Liberty will be around one million square feet. Mysore, Aurangabad, Surat and Indore are among the six cities where the centres will come up. The remaining two will be announced in a month.

These centres are expected to be operational within 18-36 months, Chaturvedi said.

“There is a need for 190 million square feet of new retail space to match the 17 per cent organised retail growth being achieved by china. Thus, the business opportunity in India is to the tune of $21 billion,” he added.

Liberty international chief executive David Fischel and John Abel, a senior director, will join the Prozone board.

The joint venture will give Prozone access to the knowledge base of Liberty, including the systems, staff training and management skills.

Provogue came out with an initial public offering last year. The issue was made to raise funds to fund its capital expenditure plans in expansion of its branded stores chain, extend existing garment manufacturing facilities and build a new product design and development centre besides meeting enhanced working capital requirements.

The company had then announced plans of expanding its branded store network, Provogue Studio, with the addition of 40 small studios and 21 large format stores (Provogue Megastores) in over 9 cities.

Recently the company announced that Saif Ali Khan will represent its new men’s wear collection and Esha Deol will endorse Provogue's women's wear category. Both of them were signed as Provogue’s new brand ambassadors, while Upen Patel continues to be the brand ambassador for denim and inner wear.