Emaar plans 100% India subsidiary

Dubai-based realty major Emaar is setting up a 100 per cent subsidiary in India, though it has an equal joint venture with Delhi-based MGF, a real estate developer and financier.

The new venture will be implemented through Hamptons International, a UK company Emaar acquired last year for $500 million, and will sell residential property and consultancy services to developers and investors. Emaar is learnt to have begun hiring people for the new venture.

"The subsidiary will operate independently. It is not necessary for us to go with the current joint venture. In the UAE, our home market, Hamptons operates as a 100 per cent subsidiary with its own distinct identity and operations," said an Emaar spokesperson from Dubai.

The Emaar-MGF joint venture was set up in 2005. Emaar is a $4 billion group with a presence in 17 countries and a market capitalisation of $18.35 billion (in March 2006). MGF is privately-held.

Emaar MGF claims to have a land bank of over 10,000 acres and has launched a few residential projects in the north and one commercial project at Mohali near Chandigarh.

The spokesperson also denied that there were any problems with MGF and said the relationship remained strong.

"Although we do not comment on our partnerships, we have strong plans of growing together (with MGF). We already have another operation in India, a joint venture with the Andhra Pradesh government, in which MGF has no ownership."

Emaar MGF Vice-Chairman and MD Shravan Gupta also said the joint venture was doing "very well". He added that Emaar MGF had 40 per cent rights in Hamptons worldwide.

Under government rules, an overseas company has to get a no-objection certificate from its Indian partner before entering the same business in India through a wholly-owned subsidiary.

An Emaar spokesperson said it "was not necessary" for Emaar to obtain a no-objection certificate from MGF to bring Hamptons to India.