DLF, Hines to Compete for New Delhi Railway Site as Prices Soar

By Sumit Sharma

Dec. 20 (Bloomberg) -- DLF Ltd., India's biggest real estate company, and Hines are among developers that may bid to build hotels, offices and shops around New Delhi's railway station, as the city prepares to host the 2010 Commonwealth Games.

The state-owned Indian Railways is seeking bids by Jan. 15 for redeveloping a quarter of its 86 hectare (212 acre) land in the capital, S.K. Mishra, an executive director at the railways said. The site is worth about $2.5 billion, according to data compiled by Cushman & Wakefield Inc.

Indian Railways appointed U.K. architect Terry Farrell, who built Hong Kong's Kowloon Station and London's MI6 Headquarters, to redesign the rail hub, as Asia's oldest network redevelops 21 stations in the next three years. Hines, a closely held U.S. investor, is developing Cannon Street station and 400,000 square feet of office space above it in London's financial district.

``Railway properties are typically in prime areas and it's a real estate play,'' Rajeev Talwar, group executive director at DLF said from New Delhi. ``We could be calling in global expertise.''

Office real estate in the city center of Connaught Place, adjacent to the station, costs about 44,790 rupees ($1,132) a square foot as of Sept. 30, rising four-fold in the past two years, the fastest among all Indian cities, according to data compiled by Cushman & Wakefield.

Prices Surge

Parsvnath Developers Ltd. and Mahindra Lifespace Developers Ltd. also said they are considering putting in bids as prices surge on demand for offices and hotels in the world's fastest growing major economy after China.

The 154-year-old rail company, which own prime land around most of its 7,000 stations across the country, is also seeking to redesign the capital's railway station to improve movement of as many as 350,000 passengers a day.

Hines is developing San Francisco's bus and rail station and a tower which will become the city's tallest building, may bid for the New Delhi station.

``It's a great location and we have a lot of belief in the robustness of the Indian economy,'' said Yash Gupta, joint managing director at Hines said from New Delhi. ``We believe India's real estate sector would be on an upward slope.''

Houston-based Hines has a joint venture with DLF to develop an office, retail, hotel and entertainment project on a 15-acre site in Gurgaon, adjacent to New Delhi.

``Yes, we will be very keen,'' said Pawan Kumar Malhotra, chief executive officer at Mahindra Lifespace Developers in Mumbai. ``The land location is very attractive.''

The railways will initially focus on leasing surplus land in Mumbai, Pune, Chennai, Bangalore, Secunderabad, Trivandrum, Howrah, Ahmedabad, Chandigarh, Bhopal, Bhubaneswar, Lucknow, Jaipur, Patna, Amritsar, Agra, Varanasi, Mathura, Gaya, and two other suburban stations in New Delhi.

The Commonwealth Games is preparing to house more than 8,000 athletes and officials from 71 countries and regions who will attend the Games, according to its Web site. The local government plans to extend Metro railway network to 110 kilometers from 65 kilometers at present.

To contact the reporter on this story: Sumit Sharma in Mumbai at sumitsharma@bloomberg.net .

Last Updated: December 19, 2007 22:02 EST