Dubai-based developer ETA Star Property will launch the first phase of a project worth $250 million, in India in 2010, as it increases its focus there and weathers the financial downturn in its home market.

The real estate development arm of conglomerate ETA Ascon Star, will launch an integrated township project near Chennai in the third quarter, as it looks to tap strong demand for property in the country, its executive director Abid Junaid told Reuters.

"When it comes to property development itself, we are looking at India more aggressively and we believe there is potential," he said.

"They are able to weather the storm much more resiliently than other economies have been able to do.There is a demand for the middle-income housing in India. There are plenty of home loans available and the interest rates are regulated by the government, and the economy is growing," Junaid added.

The first phase of the project, one of three or four phases, is worth $250 million. He declined to give a total value for the project, which will take five years to complete.

The project will be funded by local banks and pre-selling of its property, he said.

The township will be in addition to similar smaller projects in Bangalore this year, he said, declining to give further details.

India's property sector has weathered the downturn better than Dubai's, with property prices in main cities such as Mumbai and New Delhi up 30 per cent from last year's lows, having fallen some 50 per cent from their peaks in 2007.

Prices in Dubai's once-booming real estate sector were down 42 per cent year-on-year in the fourth quarter, Colliers International said in a report last month.

Prices are set to fall a further 10 per cent in 2010 and will recovery only in 2012, a Reuters poll showed in January. 
No new projects in Dubai    

ETA Star will hand over four projects in Dubai worth more than Dh2 billion ($544.5 million) to customers in 2010, but will not launch new projects, Junaid said.

"Our focus is to deliver projects which are under construction which have been launched earlier on."

The firm has developed close to five to six million square feet of its landbank in the United Arab Emirates over the last two years and has another five to six million square feet to develop, he said.

It has two plots of land in Abu Dhabi which it may look to develop in 2011 if the property market improves, he said, adding that the firm has the potential to develop 100 million square feet of landbank in India.

ETA Star Property, which was formed in 2003, builds commercial and residential property ranging from low to high-end, and has offices in Bangalore, Chennai, Dubai and London.

Its portfolio includes a recently-opened 42-storey tower consisting of high-end offices and luxury flats in the Dubai International Financial Centre.

Its parent company has interests in construction, shipping, retail, transport and education. – Reuters