Gera Developments, the Pune based real estate developers has tied up with Citigroup Property Investors, the US-based real estate investment management for a $125m (Rs 550 crore) realty project in Pune. This will be the first ever-joint venture with a foreign partner for the city-based property developer. The partners will hold a 50% stake each in the joint venture. Extension of the tie-up for more projects in cities such as Banaglore, Hyderabad and Nagpur is also on the cards.

The project at Pune entails developing over 2 million sq ft of land, which will have 600 high-rise apartments, a country club and a hotel. Work for the project is expected to start by December 2006 and will get completed by 2010.

Over the last year, there has been a surge in FDI in real estate. Citigroup has, for instance, already tied with two other real estate players for developing IT parks of the size of 1 million sq ft in Noida and Banaglore.

David Schaefer, MD, Citigroup Property Investors said, “Our total investment in India is around $350m by now. We have also tied up with another Indian real estate player in building high rise service apartments at various location in India.”

Kumar Gera, MD, Gera developments, said Gera developments hopes to sign a series of joint ventures with Citigroup in the due course of time. The company is planning to venture into other cities as well. “We are in the process of finalizing property for development at places such as Bangalore, Hyderabad and Nagpur,” said Mr. Gera.

The Indian government has now allowed 100% FDI in real estate. The FDI norms in realty sector states that the minimum capitalization should be $10m for a wholly owned subsidiary and $5m for joint ventures with Indian partners. It also states that for the development of serviced housing plots, the minimum area should be 10 hectares (25 acres) while in case of construction-development projects, minimum built-up area should be 50,000 sq. meters