May 02, 2013 04:22 PM IST | Source: CNBC-TV18

HNIs, global exposure makes India good bet: Trump Jr

Donald Trump Jr, executive vice-president, The Trump Organisation says, in an interview to CNBC-TV18, exposure to global luxury brands in the country and abroad, makes India an ideal market for the real estate company to invest in.

Donald Trump redefines luxury real estate in America - be it housing, offices, retail, casinos or even golf courses. Along with son, Donald Trump Jr , the real estate tycoon is set to expand his presence in India.

In late 2012, Donald Trump launched the residential Trump Towers in Pune in collaboration with Panchshil Realty. This 22-storey high, twin-tower project will have 44 apartments each spread across 6,094 sqft. These five-bedroom single condominiums will be accessed by private elevators and fully automated.

Around 15 apartments have already been sold and today fetch a price of nearly Rs 14 crore a piece.

In an interview to CNBC-TV18, Donald Trump Jr, executive vice-president, The Trump Organisation says that the surge in the number of high-networth individuals and exposure to global luxury brands in the country and abroad, makes India an ideal market for the real estate company to invest in.

However, Trump Jr has adopted a slow-and-steady approach by understanding market conditions and partnering with local developers to establish the brand in India.

Below is an edited transcript of the show on CNBC-TV18

Q: What makes you so bullish on India?
 
A: The Indian market assumes importance due to the growth in the high-end luxury segment and an increase in the number of high-networth individuals gaining exposure to global luxury brands.

There has always been a strong connection between a group of individuals doing very well and luxury brands. So, India is a very important market for me which I have spent a lot of time getting to learn and know over the last few years. And it is something I am very excited about.

Q: You have gone on record to say India will be one of your top three markets outside the US. By when do you see that becoming a reality?

A: I think that will chiefly depend on global growth because we are a luxury-focused brand. We cannot afford to hop in and ink any deal. We have to be careful selection of the target audience, finding the right partners within a market place that will allow us to build something that is world-class.
 
In India, a lot of growth has started to take place in Mumbai and Delhi. Some of the other smaller markets have also started to witness growth. With the high potential of growth and population trending towards the higher-end demographics, India could perhaps be bigger than just one of the third-largest markets for us. Though this growth depends on global factors, it is a very exciting market for us, one that we will really focus on.

Q: For India to become bigger than the top three global markets, you will have to choose the right local partners. What are the attributes that will aid your selection?

A: Attributes such as transparency and a proven track record, which were lacking in the market till a few years ago, have started to develop and gain strength. After zeroing-in on the right partners, we a keen on the choosing the right project within their portfolios.

Q: Who are the developers in India that impress you the most?

A: I will tell you once I have inked deals with them. Apart from working with Panchshil Realty in Pune, we are also in talks with a lot of major groups. Once I let you know who I am most impressed with, you will be able to guess who I am signing a deal with.

Q: Do you have any deals on the table right now?

A: We are working on numerous deals actually. I am hoping to announce a few in the next few weeks..

Q: How many of these deals are we likely to see in 2013?

A: If I could ink and implement those deals in 2013, we would all be very impressed. For every deal that we sign, there are a 100 deals that go out of the window. So we are working on a couple of deals that are right now in the term-sheet stage. If those deals pass that stage, we may be able to make an announcement. But again a lot is going to depend on what is discussed as these deals reach the final stages. The devil is always in the detail and once we get there, we'll have a better understanding of where we will be in the future.

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Q: Will all of these deals be similar to the kind you have signed with Panchshil Realty? Will there be any equity participation?

A: We interested in any market that is new for us as we are great developers. But we also don't have the hubris to assume that we can just step into a foreign market and try to do it all by ourselves. So our focus is on partnering with someone who understands those markets, working on the licences and getting familiar. But again as those relationships grow, ferment and turn into strong friendships, I think the possibility for investment in actual equity dollars is great.

Q: Will you look at all segments of real estate — residential, hospitality, commercial and golf courses?

A: Yes. But the focus is on the residential segment where we cut our teeth when my father started the company over 30 years ago. But the whole family's focus is on our hotel management company and which has been recognised for owning and operating some of the greatest hotel assets in the world.

Apart from hotels and resorts, we are one of the foremost developers in ultra luxury golf courses. As golf becomes a favourite sport of the high-end Indian consumer, that has become another areaof focus in India. So we have a very good understanding of all the different segment and look forward to using that expertise to gradually strengthen our brand in India .

Q: Is the Indian market mature enough for golf courses ?

A: I think India is very young in the golf world. But the demand is rising rapidly. Even if it is not the most widely played sport, I think we would still be able draw interest from the elite as we have done in the United States and other markets that may seem oversaturated with golf.

Q: Apart from Delhi and Mumbai, what are the other cities that have attracted your attention?

A: We are interested in Goa, Hyderabad and Bangalore to start with. But our focus is on the best of the best- the best property in an ideal location and a developer with a track record to match.

Q: How has the market responded to the Trump Tower in Pune with Panchshil Realty?

A: We haven’t even officially launched. There has been some minor pre-sales where the price escalated by 25 percent. About 35 percent of the tower has already been reserved. That’s a very good sign considering the project has not been officially launched in the market. So the demand for the Trump brand of luxury is very high and is very clear sign of how our brand will perform in the market.

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Q: Can you guarantee Indian buyers that the Trumps will always be involved in these projects announced under their brand in India?

A: Ultimately, the brand always comes first becaise it is the most important asset we have. To protect that for the future, it is very important for us to stay involved. Plus, our involvement adds to the resale values of their investment. So over time there is a very strong symbiotic relationship between us and the owners .

Q: Indians have started to buy Trump properties in America. Do you plan to set up an office in India to cater to that interest?

A: We have discussed this but have no plans to set up an office yet. We have partnered with my college friends at the Tribeca Group and the Wharton School of inance to conduct due diligence and observe the emergence of a clear . So it is definitely something that we have considered for the future, but we have acted on as yet.

Q: Are you excited about the luxury hotel segment in India?

A: There are a few deals that we are looking at. We have dismissed a few opportunities because they did not meet our standards. It is definitely a market where we see a very good possibility for entry.

Q: Did your father ask you head the Trump organisation's foray into India? Does he still guide the next generation?

A: It is an interesting question. In the beginning our whole lives revolved around him and his work. As the company grew and expanded, we were gradually allowed autonomy after proving our abilities to accomplish targets and meet standards.

Though I speak to him about all the deals and individual components in India, ultimately I am left to make a lot of my own decisions. Though his approval is final, he has given us the autonomy to make a lot of those decisions ourselves. When he offers that freedom, its an indication of his respect for our abilities and that doesn’t come very easily.

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