DLF forms $10 bn JV with UAE firm

New Delhi-based real estate builder DLF and Nakheel, a large property developer from the UAE, today signed a 50:50 joint venture for two integrated townships spread across 40,000 acres in India with an initial investment of $10 billion.

Nakheel is run as a private commercial enterprise under the umbrella of Dubai World. It is currently developing 17 major projects worth more than $30 billion. Nakheel's portfolio includes several land reclamation projects (creation of land where there was once water) in Dubai such as The Palms, Dubai Waterfront and The World.

A source close to the development said the JV would develop 20,000 acres each in Gurgaon (beyond Manesar and in conformity with the draft Master Plan) and in Maharashtra between Mumbai and Pune. Work on the projects is expected to begin this year and the first phase of development is expected to be completed in three years. Bloomberg reported that construction would take up to a decade.

The cost of the land would comprise nearly 40 per cent of the $10 billion investment. Roughly 70 per cent of the land has been acquired by DLF.

Interestingly, Nakheel's main competitor in residential development in Dubai is Emaar Properties. Emaar functions in India as a 50:50 joint venture partner in Emaar-Mgf. The joint venture competes with DLF in Gurgaon, the latter's main market in India. While DLF is awaiting the green light from the Securities & Exchange Board of India for its Rs 13,600 crore initial public offering, the company has in the last one year announced a slew of joint ventures. It recently unveiled its plans for a foray into the life insurance segment with a 74:26 joint venture with Prudential Financial of the US.

The company's other JV partners include Hilton Hotels, Feedback Ventures and the UK-based firm Laing O'Rourke.