Indian realty market not hit by Dubai crisis

A majority of big real estate developers in India today said they are insulated from the financial crisis in Dubai and it will not have any impact in the country's property market.

DLF, Unitech, Parsvnath Developers and Emaar MGF all said they have no exposure in Dubai, while Omaxe said it has an investment of Rs 40 crore (Rs 400 million) which it has asked for refund.

But Consultant Jones Lang LaSalle Meghraj country head Anuj Puri cautioned that if the corporate debt default in Dubai turns into a sovereign default, there would be real economic issues, which may not only hit India but others also.

"Indian property market is very robust and largely dominated by internal demand. So there will be no adverse impact on us," DLF executive director Rajiv Talwar told PTI.

Emaar MGF, a joint venture between Dubai-based Emaar Properties and India's MGF, said its operations are only in India and the developments in Dubai would have no impact.

"Our business and funding plans are on track," a company statement said. Emaar MGF is in the process of coming up with an initial public offer.

"Emaar has not asked for any external support and maintains good financial strength. Emaar Properties remains committed to its investments and Emaar MGF's business in India," it added.

Faced with funding crisis, Dubai government on Wednesday had asked creditors of state-owned Dubai World and property group Nakheel for a six-month standstill on interest payments on debts amounting to $80 billion.

Unitech vice president (corporate planning and strategy) R Nagaraju said Indian real estate developers have little exposure in Dubai, so there will be no impact of the crisis.

Expressing similar views, Parsvnath Developers chairman Pradeep Jain said: "I do not forsee any concern in Indian real estate market as it is entirely different from Dubai property market. In India almost 100 per cent demand is from (domestic) end users but in Dubai only 10 per cent is local demand."

Mumbai-based Hiranandani Group, which is developing a 90-storey housing project in Dubai through a joint venture with ETA-ASCON group, said the financial crisis there will not have any impact.

Hiranandani Developers managing director Niranjan Hiranandani said: "Already we have sold 97 per cent of the project and received 70 per cent of the money. Almost 85 per cent of the construction has been completed. The project will be completed by June next year."

The company has no debt in Dubai, he said, adding, "We don't see any negative impact on ourselves".

Omaxe chairman Rohtas Goel said the company had made an upfront payment of Rs 40 crore for two property projects in Dubai to Nakheel, but since it has been put on hold the company has asked for refund of the amount.

"We hope to get refund within one month's time," he said. The projects were envisaged to have a total cost of Rs 1,500 crore (Rs 15 billion) with estimated revenues of about Rs 2,850 crore (Rs 28.50 billion), he added.