Dec. 20 (Bloomberg) -- DLF Ltd., India's biggest real estate company, and Hines are among developers that may bid to build hotels, offices and shops around New Delhi's railway station as the city prepares to host the 2010 Commonwealth Games.

The state-owned Indian Railways is seeking initial bids by Jan. 15 to redevelop a quarter of its 86 hectares (212 acres) of land in the capital, S.K. Mishra, an executive director at the railways said. The site is worth about $2.5 billion, according to data compiled by Cushman & Wakefield Inc.

Indian Railways appointed U.K. architect Terry Farrell, who built Hong Kong's Kowloon Station and London's MI6 Headquarters, to redesign the rail hub, as Asia's oldest network redevelops 21 stations in the next three years. Hines, a closely held U.S. investor, is developing Cannon Street station and 400,000 square feet of office space above it in London's financial district.

``There will be good competition since it'll be a starting point for a huge pan-India opportunity,'' said Arvind Parakh, the chief executive for finance at Omaxe Ltd., which plans to bid for development of the railway land.

Office real estate in the city center of Connaught Place, adjacent to the station, cost about 44,790 rupees ($1,132) a square foot as of Sept. 30, having risen four-fold in the past two years, the fastest among all Indian cities, according to data compiled by Cushman & Wakefield.

`Fantastic Opportunity'

An average 8.6 percent annual growth in the past four years is boosting demand for offices, hotels and houses. The world's fastest growing major economy after China may grow at 9 percent in the year to March.

``It's a fantastic opportunity for global investors to get into India's public sector'' projects, Kumar Palghat, who manages $350 million in debt at Kapstream Capital Pty., said from Sydney. ``It has been successful elsewhere, so I don't see any reason why it won't be successful in India.''

The 63,000-kilometer (39,154-mile) network moves 16 million passengers and more than one million tons of freight every day on about 14,500 trains.

``Railway properties are typically in prime areas and it's a real estate play,'' Rajeev Talwar, group executive director at DLF, said from New Delhi. ``We could be calling in global expertise.''

`Very Attractive'

Parsvnath Developers Ltd. and Mahindra Lifespace Developers Ltd. also said they are considering putting in bids as prices surge on demand for offices and hotels in India.

``Yes, we will be very keen,'' said Pawan Kumar Malhotra, chief executive officer at Mahindra Lifespace Developers in Mumbai. ``The land location is very attractive.''

The 154-year-old Indian Railways, which owns prime land around most of its 7,000 stations across the country, is also seeking to redesign the capital's railway station to improve movement of as many as 350,000 passengers a day.

Hines, which is developing San Francisco's bus and rail station and a tower that will become the city's tallest building, may bid for the New Delhi station.

``It's a great location and we have a lot of belief in the robustness of the Indian economy,'' Yash Gupta, joint managing director at Hines, said from New Delhi. ``We believe India's real estate sector would be on an upward slope.''

Houston-based Hines has a joint venture with DLF to develop an office, retail, hotel and entertainment project on a 15-acre site in Gurgaon, adjacent to New Delhi.

The railways will initially focus on leasing surplus land in Mumbai, Pune, Chennai, Bangalore, Secunderabad, Trivandrum, Howrah, Ahmedabad, Chandigarh, Bhopal, Bhubaneswar, Lucknow, Jaipur, Patna, Amritsar, Agra, Varanasi, Mathura, Gaya, and two other suburban stations in New Delhi.

New Delhi is preparing to house more than 8,000 athletes and officials from 71 countries and regions for the 2010 event, according to the Commonwealth Games Web site. The host city may add 3,000 more hotel rooms, besides expanding roads, flyovers and extending the Metro railway network to 110 kilometers from 65 kilometers at present.

To contact the reporter on this story: Sumit Sharma in Mumbai at sumitsharma@bloomberg.net.

Last Updated: December 20, 2007 05:37 EST