 Trump's son to bet billion on Indian building boom
(China Daily)
Updated: 2008-07-23 07:40 Donald Trump Jr, whose father built a multibillion dollar fortune in real estate, plans to set up a fund of as much as $1 billion to buy property in India, betting on the nation's growing wealth. Trump may create the privately held fund with investors including an Indian family, he said in a telephone interview from New York. He didn't give specifics on how he'll raise the money, or when the first investment will be made. Trump would join Deutsche Bank AG and Lehman Brothers Holdings Inc in amassing funds to invest in a market that recorded the world's highest growth in millionaires last year, fueling demand for luxury homes. The highest borrowing costs since 2002 have ended India's five-year property boom, curbing valuations of projects and developers. "The real estate market is in a downturn now," said Ritesh Vohra, director of investments at Mumbai-based Saffron Asset Advisors, which manages more than $400 million in two property funds. "There's some more pain left over the next two years or so, and that could be an opportunity to invest." Property prices in India are likely to drop by about 20 percent to 25 percent, Sarang Wadhawan, managing director of Housing Development & Infrastructure Ltd, India's third-biggest developer by market value, told reporters. His comments echo statements made last month by Keki Mistry, vice-chairman of the nation's largest mortgage lender, and other developers. "The fund will be for acquisitions of real estate in the high end, and across the spectrum," said Trump, 30. "The market place is beginning to understand and appreciate luxury, so there is a great opening for us there, as well as in resorts." The number of Indians with financial assets of more than $1 million grew 23 percent in 2007, according to a report by Merrill Lynch & Co and Cap Gemini SA on June 24, surpassing China's 20 percent and Brazil's 19 percent growth. New York-based Trump Organization Inc also plans a residential and hotel project in Mumbai with a local partner to tap the growing wealth of middle- and higher-income Indians. The city is India's biggest trading center for stocks, bonds and commodities, and home to some of the country's largest companies including Reliance Industries Ltd and State Bank of India. "Our entry has to be in Mumbai and that's where everything is going on right now in terms of the high-end real estate," Trump said. "That's the place where one is going to achieve the highest prices per square foot. It sets the tone for all of the other future developments." Economic growth forecasts of more than 8 percent for this year are luring global funds to India, who expect growing incomes and wealth to fuel demand for property. Lehman's real estate fund last month bought a $175 million stake, its biggest investment in India's realty sector, in a Mumbai project under development by Unitech Ltd. Deutsche Bank and other private equity investors last year pledged to invest $425 million in Mumbai-based Lodha Group. Agencies (China Daily 07/23/2008 page16) |
