Donald Trump Jr, son of the US tycoon and celebrity Donald Trump has announced his attention to create a property fund to invest in Indian real estate. The privately held fund could reach as much as US$1 bil, according to a report in The Times of India.

"The fund will be for acquisitions of real estate in the high end, and across the spectrum," said Trump Jr, who was a keynote speaker at the Cityscape India conference in 2007. "The market place is beginning to understand and appreciate luxury, so there is a great opening for us there, as well as in resorts." His fund would join around 20-25 US$500 mil plus India focussed funds today.

According to some experts, the Indian property boom is over, with sub-prime issues tightening mortgage borrowing. "The real estate market is in a downturn now," said Ritesh Vohra, Director of Investments, Saffron Asset Advisors, told the Times of India. "There's some more pain left over the next two years or so, and that could be an opportunity to invest."

Ambar Maheshwari, Director - Investment Advisory, DTZ India, however believes that different asset classes are subject to different conditions and investors should act accordingly. For residential, "Huge pent up demand exists. However sales have slowed down due to affordability issues and high interest rates." For commercial, "in the unlikely event that all the announced supply hits the market" there will be a correction.

With the number of Indian millionaires growing 23 percent last year, Trump Organization Inc is also planning a luxury residential and hotel development in Mumbai. Whether the plans will come to fruition remains to be seen, as Maheshwari highlighs, "luxury/ aspirational products are usually the first to get affected during a slowdown." However he does point out to "an existing shortage in the industry" in terms of hotel space. RFP

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