Donald Trump seeks to invest in India

Mumbai: Donald Trump ’s first visit to India comes with all the theatrics that the man has come to represent—a venue swarming with security, an invitation with an undisclosed location, an elaborate breakfast followed by the entry of the Trump entourage and the man himself.

“You know, I am very good with real estate. I can look at a place and say whether it has energy or it’s a place that’s not going to make it. This is a very very vibrant area and this is just the beginning as far as I am concerned,” says Trump while comparing Mumbai with New York, adding that he plans to raise his investments in Mumbai and India.

“I have a lot of money so I will invest,” quips Trump. “I won’t invest all my money here, but I will invest.”

So far though, the Trump organization has not invested in any of its projects in India, choosing instead to work with local developers via brand licensing agreements. Trump is involved in two projects—the Trump Tower in partnership with the Lodha Group in Mumbai, and a luxury residential project with Panchshil Realty in Pune.

“As of now, there is no capital investment from him in this (Trump Tower) project but his investment office is evaluating. They will be looking at acquiring apartments and not come in to fund as construction finance,” a person familiar with the talks said, requesting anonymity.

Trump re-entered the Indian market with Panchshil’s project in August 2012, after a previously failed attempt in 2010 when a luxury residential project with Rohan Lifescapes was scrapped.

Trump Tower, construction for which started earlier this year, will deliver 320 luxury apartments in a 75-storey tower in the upmarket Lower Parel area of Mumbai.

The project will come up on 17 acres called The Park, which Lodha had acquired from DLF Ltd in August 2012 for Rs.2,727 crore. This is the third residential tower which has been launched as part of The Park development.

The Trump Tower will offer 3,4, and 6 bedroom apartments at Rs.40,000 per sq.ft, which works out to prices ranging from Rs.9-18 crore.

That doesn’t sound too expensive, argues Trump.

“Real estate is Mumbai is way too cheap. That’s why its such a good investment,” he says, adding that 100 of the apartments have been sold.

The project will be completed in 4-5 years.

Demand for branded residences is rising and branded residences are being launched by hoteliers and designers like Jade Jagger and Giorgio Armani across the country, according to Ramesh Nair, chief operating officer, India, and international director at property consultancy Jones Lang LaSalle India.

“A lot of globally recognized brands are coming to India and global Indians who are used to staying in these ultra-luxury hotels and homes get the assurance of quality and consistency from the developer,” said Nair.

Apart from lending its name to residential projects, the group is evaluating hospitality projects across the country, said Donald Trump Jr., the New York-based developer’s son.

“We want to do five star projects in the hospitality segment. We are in couple of conversations. Today, the cost of building a hotel does not adjust with the average daily rate that the hotel earns,” said Trump Jr., adding that the group is looking at opportunities in New Delhi, Hyderabad, Chennai and Goa.

While Trump Jr. declined to say whether the group would follow a licensing strategy or an ownership-based strategy while deciding on its plans for the hospitality sector, his fathersaid the group prefers an ownership models and owns most of the hotels it operates worldwide.

“I think for a group like them to come and invest in the luxury hotel space bodes well for the country. It will be a good investment,” said Vijay Thacker, director at global hospitality consultancy Horwath HTL. “There are (a) few new brands who have entered the country recently but they are all management contracts.”

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.