DLF Ltd is forging a 50:50 joint venture with Nakheel, a large property developer of the UAE, for two integrated townships in India at a whopping investment of $10 billion.
Set up under the auspices of the Dubai government, Nakheel functions as a private commercial enterprise and is currently developing 17 major projects worth more than $30 billion, and also has projects like The Palms, Dubai Waterfront and The World to its credit. This will be its maiden foray into India.
Interestingly, Nakheel's main competitor in residential development in Dubai is Emaar Properties. Emaar operates in India as a 50:50 joint venture partner in Emaar-MGF. This joint venture competes with DLF at Gurgaon, the latter's main market in India.
Even as DLF awaits the green signal from the Securities & Exchange Board of India for its Rs 13,600 crore (Rs 136 billion) initial public offering, it has announced a slew of joint ventures
A fortnight ago, it unveiled plans for a foray into the life insurance segment with a 74:26 joint venture with Prudential Financial Inc of the United States.
The company's other joint venture partners include Hilton Hotels, Feedback Ventures and United Kingdom-based infrastructure company Laing O'Rourke.
The joint venture involving DLF and Nakheel will develop a total of 40,000 acres at Gurgaon (beyond Manesar and in conformity with the draft master plan) and between Mumbai and Pune in Maharashtra.
A source close to the development said 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.
Construction work on the projects is expected to begin this year, with the first phase scheduled to be completed in three years.
DLF will raise funds through debt, equity and internal accruals. The JV could also look at a realty fund in the future, on the lines of the $1.5 billion DLF-Laing O'Rourke infrastructure fund.
