City-based QVC Realty, India’s first venture capital-funded real estate firm, is expanding into retail and will pump in Rs700 crore in its first phase of expansion.

The one-year-old realty firm will build two malls here at Whitefield and Kanakpura Road in three years. It is also constructing another half-a-million sq. ft of retail space in one of its two integrated townships in Gurgaon, near Delhi.

The company says there is great demand for large retail malls in the so-called tier I cities. “We are looking at building large shopping malls, each a million sq. ft and above, in only tier I cities such as Delhi, Bangalore, Chennai and Hyderabad,” said founder and CEO Prakash Gurbaxani.

“Though many shopping malls may not have been doing good business, retail, if executed and managed well, is a good investment option,” he said.

QVC started off in April last year after it raised $100 million (Rs424 crore at current rates) from IL&FS Investment Managers Ltd, the private equity arm of Infrastructure Leasing and Financial Services Ltd. The firm will launch four residential projects this year.

The company is also looking to build integrated townships in Chennai and Pune.