Is Trump Jr too late for the Real estate party?

Last month, Donald Trump Junior, son of Donald Trump, who is also the executive vice president of acquisitions and strategy for Trump Organization, annouced a $1 billion real estate fund for investments in India. He is looking at investing in the high end and also resorts.

However, the idea had come to Trump's mind at a real estate conference in Mumbai when the market was booming last year in November. Indian market was in its fifth year of boom and international players were investing heavily on India residences, malls, offices, townships, etc.

The scenario is a lot different today, with the interest rates and inflation surging and in turn leading a decline in the demand for real estate. The shares of the Indian developers are dangling to their all time lows, demand for homes and home price appreciation is slowing. The severe valuation mismatch with developers not ready to sell out cheap and investors asking for IRRs of 25-30% has made it extremely difficult to invest in real estate.

However, distressed assets (which have come up one too many) is proving to be opportune to buy currently. But, Trump will be competing with the established players (including U.S. companies such as Wachovia, Trinity Capital, Vornado Realty Trust, and Tishman Speyer). Dubai firms have been investing heavily in Indian estate for years now and have good connections with landowners and government officials and a deep understanding of the country's shadowy world of land acquisition and development.

Trump says his fund will start slow, investing first in luxury real estate in Mumbai before expanding to cities such as Bangalore, Hyderabad, and Delhi where the IT sector is strong.