Mahindra Lifespace Developers, part of $15.9 billion Mahindra Group, has bought the stake of private equity Arch Capital in its joint venture residential project at Chennai. The buy out of the stake was estimated to be around Rs 70 crore.
Mahindra Lifespace formed a JV in 2009 to set up a Rs 400 crore residential project on the outskirts of Chennai. The private equity real estate fund, ARCH Capital Asian Partners, L.P., managed by ARCH Capital Management Company Limited, had a 49 per cent stake in the JV. The fund is an affiliate of Ayala Land, the Philippines’ largest trusted real estate brand, and Ayala Corporation.
Following the buyout the SPV will become a 100 per cent subsidiary of Mahindra Lifespace now.
While declining to comment on the value of the stake, Anita Arjundas, MD &CEO of Mahindra Lifespace Developers Ltd (MLDL) confirmed the development and said “we have been discussing a buyout with them and concluded it recently”. MLDL is the real estate and infrastructure development arm of the Mahindra Group.
She added, it was a normal commercial transaction. Numbers cannot be shared as it is confidential.
When asked the reason behind the buy out, she said, “As I mentioned, it was just a normal commercial transaction. They have only one investment in India and as we were ready to buy and they ready to sell, we closed the same.”
On the project development, she said it is progressing well with 70 percent of the villas and 40 per cent of apartments were alloted. Phase I has already been handed over and other phases are under construction.
The JV was to build a gated residential community in 55 acres within Mahindra Lifespaces’ Special Economic Zone (SEZ) at Mahindra World City. The residential development will offer an exclusive community of around 750 residential units with sprawling green spaces and large community interaction zones.
Mahindra World City, spread over 1500 acres in the outskirts of Chennai near Chenglepet, has three sector-specific SEZs for Information Technology, Auto Ancillaries, and Apparel & Fashion Accessories. The leading Indian and multi-national companies at Mahindra World City include BMW, B Braun, Cap Gemini, Infosys, Renault Nissan, Mindtree, Timken, TVS Group, Tech Mahindra and Wipro. Mahindra World City is expected to have a working population of 100,000 people by 2015 with current employment at close to 10,000 persons.