Mumbai: The Hinduja group plans to invest Rs 1,200 crore in property development business in the UAE, while its flagship Ashok Leyland will set up a commercial vehicle manufacturing unit in Dubai.

The group has signed a memorandum of understanding with Dubai World to explore investment opportunities in Dubai.

Ashok Leyland managing director R Seshasayee and Dubai World chairman Sultan Ahmed Bin Sulayem signed the agreement.

While the property business would cover development of commercial space and resorts and other real estate activities, details of the new commercial vehicle manufacturing project were being worked out, Hinduja group (India) chairman Ashok P Hinduja said.

"The company has already bought land in the Waterfront Project of Al Nakheel, which is a member of Dubai World  -  an investment and holding company owned by the government of Dubai," Hinduja added.

He said the group would be developing 2 million sq ft of property.

Commenting on the tie-up, Dubai World chairman Sulayem said the tie up with the Hinduja group would bring invaluable benefits of scale to the projects implemented in Dubai.

The Hindujas have also signed a joint venture agreement with UAE's real estate group LLC, a unit of Dubai Global, for developing medical services and infrastructure in cities of both countries.