Mumbai: DLF, India's largest real estate developer, has entered into an agreement with Al Nakheel group of the United Arab Emirates to develop two integrated townships in the suburbs of Mumbai and New Delhi, involving investments of $20 billion.

The companies will initially invest $5 billion each over the next three years to build complete townships at unspecified locations in India, company sources said.

The 50:50 joint venture would capitalise on India's real estate boom to build the townships across 40,000 acres of land.

Reports said, New Delhi-based DLF and UAE's leading real estate developer Nakheel have already acquired about 70 per cent of the land needed to set up the townships, which will include commercial and residential centers.

In January, DLF said it had filed a new and downsized initial share sale offer with the market regulator almost six months after investors balked at its plan to raise $3 billion for its ambitious expansion plans.

DLF said it planned to raise $2.2 billion via an IPO in 2007, down from the $2.98 billion of shares it proposed to sell in August 2006. This was withdrawn after major investment banks said the company's plans were unrealistic.

The Hindujas are also investing millions of dollars in the UAE for property development business there. "The company has already bought land in the Waterfront Project of Al Nakheel," Hinduja group chairman Ashok P. Hinduja said.

The Hinduja group has also announced plans to enter into a healthcare joint venture with Limitless, a subsidiary of Dubai World. Both companies will invest $1 billion over the next three years for medical facilities in key cities like Delhi and Mumbai.

In the past few months, DLF has signed agreements with several companies for joint ventures to tap India's growing market. The company's joint venture partners include Prudential Financial, Hilton Hotels and UK-based infrastructure major Laing O'Rourke.

The DLF-Al Nakheel deal is part of a series of agreements inked between the governments of India and the UAE during a visit by Sheikh Mohammed bin Rashed al-Maktoum, vice president and prime minister of UAE and ruler of Dubai.

UAE is home to an estimated 1.4 million Indians.