Mumbai: Dubai-based Damac Properties, a closely held developer, plans to invest around $5 billion (Rs19,700 crore) in India over the next three years as a booming economy spurs demand for real estate.
The developer will construct houses, offices and shops in Mumbai, New Delhi, Hyderabad and Bangalore, said chairman Hussain Sajwani over telephone from Mumbai. The first project will be sSoaring office rents and a shortage of aptarted in 12 months, he said.
artments is attracting developers, including Donald Trump Jr. and Emaar Properties PJSC to India. Damac has built waterfront luxury projects in the UAE and is investing in Saudi Arabia and Egypt as it expands outside its home base of Dubai.
“We plan to meet the funding requirement from our internal resources,” Sajwani said.
“There is a latent demand for high-end and luxury properties as the economy booms and income levels rise,” said Malvika Chandra, head of India research at Knight Frank in Mumbai. “The right products are getting lapped up.”
The country’s 1.1 billion population faces a shortage of 25 million housing units, according to government data.
Demand for property is soaring in India, which is poised for 9% growth in the year to 31 March. The number of Indians with the financial wealth of $1 million or more rose by one-fifth, the second fastest in Asia after Singapore, to about 100,000 last year, according to Merrill Lynch & Co. and Cap Gemini SA.
“We are on the luxury segment of the market so rising prices in India is not a concern,” Sajwani said.
Developers including Emaar MGF Land Pvt., Lodha Developers and Oberoi Constructions Pvt. Ltd are seeking to benefit from rising demand from Mumbai, New Delhi, and Bangalore and Hyderabad, the main hubs for the telecommunications, software and pharmaceutical industries.
Still, a rise in the supply of high-end houses could hurt their future growth, according to DTZ Research. The number of high-end houses in Gurgaon could triple to 10,500 by 2010, DTZ said. Most of these are being constructed by DLF Ltd, Emaar MGF Land, Unitech Ltd and Parsvnath Developers Ltd, it said. Bloomberg