The Hindu : Business : Mahindras to invest Rs. 4,500 cr.

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Tuesday, Apr 22, 2008
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Business

Mahindras to invest Rs. 4,500 cr.

K. T. Jagannathan

To develop four gated residential communities of 55 acres each

Floats special purpose vehicle
Partners Philippines’ private equity fund

CHENNAI: The Mahindras have drawn up a over Rs. 4,500 crore four-phase investment plan to develop four gated residential communities of 55 acres each at Mahindra World City near Singaperumal Koil, some 45 km from here.

Indicating this in an interaction with The Hindu, Arun Nanda, Vice-Chairman of Mahindra Lifespace Developers Ltd., said the first phase would see the development of 55 acres into a gated residential community at an estimated cost of over Rs. 1,000 crore. Mahindra Lifespace is the real estate arm of the Mahindra Group.

Mr. Nanda said the 55-acre land had the potential to develop three million sq. ft. of residential space. The project would be implemented by a special purpose vehicle, Mahindra Residential Development Ltd. The Mahindras, he said, had roped in ARCH Capital Asian Partners, L.P., a private equity real estate fund managed by ARCH Capital Management Company Ltd of the Philippines, to develop the first gated residential community. Three more independent residential gated communities would come up at Mahindra World City. Each would come up on 55 acres, he added. The tie-up with ARCH pertained only to the first phase, he said.

ARCH Capital is an affiliate of Ayala Land, the largest real estate brand in the Philippines, and Ayala Corporation. While the Mahindras would hold 51 per cent equity in Mahindra Residential Development, 49 per cent would be held by an ARCH-controlled investment arm, Mr. Nanda said.

The entire land, 200 acres, earmarked for residential houses had the potential to develop 15 million sq. ft. of housing space after providing for an FSI (floor space index) of 75 per cent. He said the Mahindras would take a call on partners for developing other three gated residential communities at an appropriate time.

First phase

The first phase of the project would go on stream in two years. It would contain 750 residential units, with sprawling green space and large community interaction zones.

It would take eight years for the four-phase project to complete, he added. Apart from the four gated residential community projects, a proposal was also on to develop 55 acres to set up support systems such as retail and recreational facilities.

Mr. Nanda said talks were at an advanced stage with a leading hospital here to set up a 100-bed hospital at Mahindra World City.

Mahindra LifeSpace, he said, had already developed its first 250-home residential project, Sylvan County, on 25 acres. Fifty homes had already been delivered.

Mahindra World School

The remaining would be delivered in the next few months, he added. Mahindra World School would commence operations at Mahindra World City from the academic year starting June, he said.

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