UNITED STATES - Pramerica Real Estate Investors is expecting to invest as much as $800m (€517m) over several years in a joint venture to develop the second phase of a project along the Sea of Cortez in Mexico, known as CostaBaja Resort & Marina.

Working with its venture partner, Grupo Concord, Pramerica is seeking to develop and construct 1,800 condominium units and a golf course in the second phase of the project, to target buyers in Mexico, the US and Canada who are looking for a second home or vacation property.

Salvador Magana, portfolio manager for Pramerica Pramerica, is confident the housing element of this project will not be affected by the fallout in the US housing market.

"At this point there has been no affect on the housing portion of this project from what is going on in the United States," said Magana.

"This development stands on its own and will draw a great deal of interest because there is no other project like this in the Baja Peninsula area of Mexico."

The golf course will be an 18-hole championship facility, designed by golf legend Gary Player, and will be the first course he has worked on in Mexico.

Construction should begin in the third quarter of this year and is expected to be completed by the end of 2009.

The project already has a marina for 250 boats, a 120-room hotel, retail and entertainment areas surrounding the marina and 50 residential units.

Pramerica is also thinking of expanding the marina as demand means the existing slips are 100% occupied and there is now a waiting list of people wishing to get rent space.

Capital from the venture is being sourced from its PLA Residential Fund III commingled fund, which closed this spring after raising $900m in equity.

Investors in the commingled fund included New Jersey Division of Investment and New York State Teachers Retirement System, as they expect to see projected returns of 18- 23% gross IRR.