Trump Organization recently signed a deal with real estate firm Unimark Group for a residential project in Kolkata, and the group is in talks for a second project in Pune. According to the article in live mint.com, there are plans for the Trump Organization to look for opportunities in real estate across large cities in India.
The deal in Kolkata is to build a 400,000 ft.² residential project that includes the signature Trump Tower. As yet the project is in the design stage and hasn’t been announced. The project will also include reasonably priced units of around 2500 ft.² and should be launched early 2017. The project involves a local developer partner.
Trump Organization is also in talks to partner with Panchsil Realty, a Pune-based company for a project in the Kharadi area. This project is anticipated to have four towers and will be 500,000 ft.². The first two-tower project between Trump and Panchsil was in Kalyani Nagar and is already completed. Talks to do a second project in Kharadi originally began in 2014 but the project failed to come to fruition due to poor market conditions. However, now it looks as if it’s likely to be revived although the article states that the deal hasn’t yet been signed.
Trump Organization works with local developers in India through a brand licensing agreement and hasn’t made any equity investments. Trump residential properties sold in India have been priced between RS 3.5 to 15 crore. So far the organization has signed five projects with different partners that includes one in Mumbai with Lodha Developers Pvt. Ltd, a residential and an office project in Gurgaon with M3M, as well as the deal with Panchsil Realty in Pune and with Unimark Group in Kolkata.
However, the slowdown in the real estate market has begun to hit quite hard and the effect is likely to be amplified by the recent demonetization that is expected to have a short to medium term negative effect. There is less concern about the high-end luxury projects because these tend to sell well. The luxury sector has been slower the last three years also, but demand has begun to improve over the last few months. A recent report showed homes in the affordable sector and which were priced up to RS 50 lakh, as well as those in the ultra-luxurious sector and which were priced above RS2 crore both experiencing a rise in demand, with demand for properties at the high-end of the market showing 38% annual growth.