The company, part of privately held ETAAscon Group, is looking to supplement its own funds to develop 120 million sq ft in India, and enter other markets in Asia. It has also just snapped up land in Vietnam and Malaysia.
The new fund will be aimed at Middle East investors, said ETA Star Property's executive director Abid Junaid. “We're talking to institutional investors to raise US$250mil in a first tranche,” Junaid told the Reuters Global Real Estate Summit in Singapore.
Abd Junaid
He added that ETA Star also wanted to raise US$100mil-US$150mil from Islamic bonds, or sukuk: “Syariah-compliant products are very much in demand in the Middle East.”
ETA Star is one of several Middle East firms, including EMAAR Properties and Nakheel, that have joined a wave of foreign investment in Indian property since the country eased rules on inward investment in the construction industry in 2005.
Junaid, who is from the southern Indian city of Chennai, said the firm had bought about a fifth of its land in India before the boom of the last three years, which has seen values in many areas quadruple. ETA Star is building housing, information technology parks and shopping centres in Chennai and Bangalore.
Although internal rates of return for property investment in India are still above 20%, Junaid was worried that soaring construction costs were making property more expensive, and slowing sales of housing.
By Reuters
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