AP News, December 3rd, 2007
An investment group from the United Arab Emirates said Monday it has set up a joint venture in India that will invest $5 billion over the next five years to develop residential and commercial properties.
The joint venture, Rakindo Developers Pvt. Ltd., plans to build independent townships closer to smaller Indian cities, where real estate is poised for high growth in the coming years, said Managing Director Prasad Koneru.
Monday's announcement underscores the changing preferences of investors from Arab countries, who are increasingly shifting their focus to emerging markets in Asia from traditional destinations like the United States.
Rakindo is a joint venture whose ownership is split evenly between Chennai-based Trimex Group and Rakeen, the real estate arm of the UAE-based Ras Al-Khaimah Investment Authority.
Rakeen plans to pump in about $200 million into the joint venture this year to support land acquisition and other expenses, said Khatar Massad, adviser to the crown prince of Ras Al-Khaimah, one of the seven emirates of UAE.
"As our projects take off, we will bring in more money as and when needed," Massad told reporters on the sidelines of the World Economic Forum.
The company currently has plans for six projects, including a marina — India's first — along the southern coast, 44 miles off the southern Indian city of Chennai.
The first project, a $1.5-billion township along with a special economic zone near Chennai, will kick off in the first quarter of next year, he said.
Rapid economic growth, rising middle class incomes and increasing urbanization is boosting demand for new houses, shopping malls and hotels in India — one of the world's fastest growing economies.
Real estate space has been a preferred business for Arab companies looking to invest in India.
Separately, Dubai-based Emmar Properties, the world's largest real estate company by market capitalization, said Monday it is looking to list its joint venture in India on local stock exchanges. Emmar MGF Ltd., the joint venture, plans to offer about 10 percent of equity to investors in January, said Mohamed Alabbar, chairman of Emmar Properties.
Emmar MGF Ltd. hopes to raise about $1.6 billion from the initial public offering, he said.
