Sept. 3 (Bloomberg) -- Plaza Centers NV, the developer of malls controlled by Israel's Elbit Medical Imaging Ltd., plans to invest 50 billion rupees ($1.2 billion) in India to build entertainment and commercial centers.

The company will develop 50 properties in five to seven years, the Amsterdam-registered company said in a statement in Mumbai today. It will construct the malls in cities such as Bangalore and Pune.

Plaza is investing in India's real-estate market as economic growth puts more money in the hands of Indians, fuelling demand for shopping malls and entertainment centers. The country's real-estate development market is forecast to increase to $90 billion by 2015 from $12 billion in 2005, Moody's Investors Service said in June, citing market estimates.

``India is progressing and opportunities are increasing,'' Abraham Goren, executive vice chairman of Elbit Medical Imaging told reporters. The country is ``in a much better position than Europe was when we started. So, we intend to replicate the success we have seen in Europe.''

Plaza earlier this year bought 50 percent stake in a company building malls at Pune, near Mumbai, for an unspecified amount. The 14-acre site will also be developed into offices and apartments, costing $175 million. It also bought a similar stake in a six-acre plot near Pune and proposes to spend $90 million in it.

Retailers, Protests

Plaza Centers is negotiating to develop land for local and global retailers, Goren said without elaborating.

Wal-Mart Stores Inc., the world's biggest retailer, and India's Bharti Group will set up wholesale stores and a supply chain in the world's second-most populous nation.

Expansion plans by retailers are being threatened across India as opposition intensifies from political parties, street vendors and family run stores.

In August, the state government of Uttar Pradesh ordered the closure of stores operated by Mumbai-based Reliance Industries Ltd. in two cities. Southern state of Kerala plans to restrict the number of outlets run by retail chain operators to protect small, family run stores, C. Divakaran, the state's minister for food and consumer protection, said Aug. 28.

``The protest we are seeing are not new,'' Goren said. ``We have seen protests in the U.S. and Europe each time small shopkeepers' interests are affected. I am sure in India the issue will be settled though I can't say when or how.''

The Indian government, which is seeking to ease overseas investment rules in the retail industry, allows foreign investment in companies that sell a single brand.

To contact the reporter on this story: Anoop Agrawal in Mumbai at aagrawal8@bloomberg.net.

Last Updated: September 3, 2007 07:27 EDT