In the prospectus for its proposed Indian listing, Emaar MGF makes a statement that markets less frothy than India's might give investors pause for thought.
"Most of our projects are in the preliminary stages of planning and require approvals or permits," said the company, a joint venture between MGF Developments, a small Indian property group and Dubai-based Emaar Properties, the largest Arab developer.
The document went on to say that 83 per cent of the joint venture's land is still zoned agricultural a potentially challenging issue in India where winning government approval to convert farmland for development can be controversial.
This might not seem a strong base for a company planning to raise about $2bn on the domestic stock market in coming months. But in India's booming property market, lack of track record is no longer necessarily a barrier to entry.
Since India eased rules governing foreign investment in property in 2005, western private equity funds and, now increasingly, the cash-rich states of the United Arab Emirates across the Arabian Sea from India, have flocked to the country in search of high returns.
Nakheel, another Dubai-based developer, has announced a $10bn plan to invest in Indian real estate in partnership with DLF, India's largest listed developer. And Rakeen, a government-owned developer from Ras Al Khaimah, part of the UAE federation, yesterday said it was tying up with Indian partner Trimex Group to invest $5bn.
The one thing that unites the Arab-India partnerships is their raw ambition.
Emaar MGF already has development plans for most of its more than 12,544 acres of land, which equates to a developable area of 559m square feet. That is more than double the 225m sq ft that domestic market leader DLF has constructed in its six decades of existence.
In Emaar and MGF's favour is that, while their Indian joint venture is new, individually they have both been in the property business for some years.
The two companies have already begun preparing for the challenges facing the booming development industry in India, signing up Australia-based builders Leighton International and Multiplex to help overcome a chronic shortage of local construction capacity.
The joint venture between Rakeen and Trimex, called Rakindo Developers, is less ambitious, with plans to develop 4,000 acres or 50m sq ft in the next three to seven years.
But Rakindo's capacity to execute its plans is also less apparent. Prasad Koneru, Rakindo's managing director, said Trimex was a specialist miner for the ceramic, iron ore and bauxite industries with a turnover of $500m a year. Rakeen was active in UAE property but this was its first real estate venture in India.
Mr Koneru said the pair wanted to build township developments outside India's cities, where property prices were lower. Their plans included building India's first marina between Chennai and Pondicherry on India's south coast.
"We didn't want to be part of the existing real estate hype in India. We wanted to do something different," Mr Koneru says.
Private equity operators said they were sceptical of many new boom market entrants such as Rakindo.
"I'd like to see where they're going to put the money $5bn is a huge amount to put into India," said one consultant.
However, no matter what happened with this venture, he expected to see more such investment in India from foreign state-controlled companies in the coming months. "Sovereign wealth funds are not particularly strong in Indian property at the moment but I expect that to change," he said. "If the capital's going to flow in here, they will come too."
Copyright The Financial Times Limited 2007