Dubai firm to invest $500 mn in townships

Emaar in 60:40 JV with Delhi-based MGF Group.

The Dubai-based Emaar Properties has drawn up plans to invest $500 million in the development of integrated township projects in the country.

The company, in which the government of Dubai has a 33.8 per cent stake, is setting up a 60:40 joint venture with the Delhi-based MGF Group which will invest $333 million in the $833 million project.

Details could not be ascertained, though sources close to the development said Emaar planned to build homes, commercial properties and infrastructure like roads and mass rapid transportation systems.

Emaar has sought the government's permission to invest up to $500 million in the joint venture company through its Mauritius-based subsidiary, Emaar Holdings 2 Ltd. To begin with, the joint venture will be capitalised at $10 million.

This, the sources added, was the largest foreign direct investment proposal in real estate in India.

Listed on the Dubai Financial Market, Emaar has a market capitalisation of $9.5 billion. It accounts for 5.7 per cent of the Dow Jones/DIFC Arabia Titans Index, which represents the 50 blue-chip companies in the region.

It reported a profit of around $460 million for the year ended December 31, 2004. Emaar has been associated with large projects like the Burj Dubai Tower and the Dubai Mall, the world's largest shopping and entertainment complex. Emaar also owns Dubai Bank.

Emaar already has a joint venture with the Andhra Pradesh government, called Andhra Pradesh Industrial Infrastructure Corporation.

But it is unlikely this will come in the way of it setting up the second joint venture in the country as the existing project in the southern state is only for the purpose of building a golf course and does not entail any future projects.

Emaar plans to make all its future real estate investments in India through the joint venture with the MGF Group, which has built, and manages, shopping malls like Metropolitan and Plaza around Delhi.

It will be responsible for the day-to-day management of the joint venture company and will also appoint the key executives of the company.

The MGF Group has interests in real estate development, automotive and finance. Its automotive turnover is estimated at Rs 500 crore.

Hot property

Emaar is setting up a 60:40 joint venture with the Delhi-based MGF Group, which will invest $333 mn in the $833 mn project

33.8% of Emaar, which is listed in Dubai, is held by the Dubai govt; the rest by the public and FIs

Sources close to the development say Emaar plans to build homes, commercial properties, roads and mass rapid transportation systems