Kardan to Invest Up to $1.2 Billion in China, India

By: Property

Feb. 11 (Bloomberg) - Kardan NV, the Dutch-Israeli investor in real-estate and finance companies, plans to invest as much as 800 million euros ($1.2 billion) to develop housing and commercial centers in China and India.

'We see enormous demand in these markets,'' Alain Ickovics, chairman of the management board, said in an interview at Kardan's Tel Aviv headquarters. 'Go to China, go to India, and see what their needs are.'' Kardan currently has six real-estate developments in China and one in India.

GTC Real Estate NV, Kardan's property unit, has earmarked about 200 million euros for equity investments in Asia, Ickovics, 48, said. The total amount, including financing, is likely to be about two to four times that figure, he added.

Kardan, which operates mainly in central and eastern Europe, wants to profit from economic growth in the world's two most populous countries. China's economy expanded 11.4 percent and India grew 9.6 percent last year, sparking demand for new homes, offices and shops.

Kardan fell 0.25 euros, or 2.67 percent, to 9.10 euros in Amsterdam trading.

The stock has fallen about 18 percent in the last year, less than the 30 percent decline in the Estate-15, Israel's real-estate index. The property developer has a market value of 735.9 million euros.

Investments in India

The investment company is looking at opportunities in New Delhi, Mumbai and Pune, where GTC said in November it would build its first project in India. It may expand into other countries in Asia, Ickovics said.

'Mumbai is the largest Indian financial center, Delhi is the capital and Pune offers strong potential for growth because of its location - not far from Mumbai - and its large, educated labor pool,'' Ickovics said.

In China, Kardan is targeting residential and retail projects in 'second-tier'' cities of 3 million to 15 million people. There are 350 to 400 million Chinese who are expected to move from rural areas to cities in the next decade to find work, Ickovics said.

Net income in the third quarter plunged to 220,000 euros from 10.6 million euros because of a one-time loss linked to the revaluation of options granted to management, Kardan said Nov. 30. Revenue rose 61 percent to 253 million euros.

Unlike Elbit Imaging Ltd., the Israeli shopping-mall builder that is shifting its focus from Europe to India, Kardan isn't winding down operations in Europe, where it plans to expand into Ukraine and Russia.

'We are brick builders,'' Ickovics said. 'We are creating value step by step. We don't expect to make a billion tomorrow. For us, five or 10 years down the road is fine.''

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