The deal could also lead to one of India's biggest retail real estate investment trusts when CapitaLand spins off the investments.

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"We expect to deepen our retail and fund management presence in India to become a significant long-term retail real estate player there over time," said CapitaLand, South-east Asia's biggest property group.

Malls are one of the fastest growing areas in Indian real estate. In 2002, India had six with 1m sq ft of space, according to Jones Lang LaSalle Meghraj, the property consultancy. This rose to 90 with 19m sq ft at the end of 2006 and is set to rise threefold this year.

Driving this growth is a rapid rise in middle-class salaries and the emergence of a high-income class, with 1.6m households earning more than $100,000 a year.

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CapitaLand's expansion in India's retail property sector follows a similar push into China by the company in the past few years as it seeks to reduce its dependence on the mature Singapore retail property market by investing in fast-growing economies.

CapitaLand said it would invest S$1bn in joint ventures with Bangalore-based builder Prestige Group in seven malls in south India and with Delhi-based Advance India Project in eight sites in north India.

CapitaLand's only current India retail investments are in Mumbai's Market City and a $75m investment in Horizon Realty Fund, which owns six shopping centres in co-operation with Pantaloon [Get Quote] Retail, a local retailer.

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CapitaLand is planning to list the Indian investments as a Reit, similar to the CapitaLand Retail China Reit, which includes Chinese shopping centres.

The company has already invested in 37 malls in China.

The company has not decided when and where the Indian Reit would be listed because of global financial turmoil.

Singapore is a market favoured with investors in Reits, but Indian regulators have recently released draft guidelines as part of efforts to set up a home-grown market.