Mah Lifespace, Ayala JV to set up township

Mahindra Lifespace Developers, the real estate company of the Rs 18,000 crore Mahindra group, has entered into a joint venture with private equity fund ARCH Capital Asian Partners to develop a residential township at the Mahindra group's special economic zone, Mahindra World City, near Chennai.

The Mahindra group will have a 51 per cent stake in Mahindra Residential Development, the JV company and ARCH Capital will hold 49 per cent.

The project, on 55 acres, will have 750 residential apartments apart from retail and recreational facilities. It did not disclose financial details, pending the announcement of its financial results.

ARCH Capital is part of the $4.3 billion Philippines realty company Ayala Land, which is into developing upscale malls, hotels, high-end office and residential complexes.

Mahindra World City, being developed by the Mahindra group and the Tamil Nadu Industrial Development Corporation (TIDCO), has three sector-specific SEZs for information technology, auto ancillaries, and apparel & fashion accessories.

Mahindra Lifespace recently signed an agreement with the Board of Investments of Sri Lanka to develop a 65 acre SEZ in Sri Lanka.

Mahindra Lifespace has a land bank of nearly five million sq ft and is developing two other Mahindra World Cities at Pune and Jaipur.

Banking on returns in excess of 25 per cent, a slew of private equity funds have been investing in Indian real estate. Global private equity funds such as Citigroup, Blackstone, 3i, and doemstic funds such as HDFC, Kotak have invested, or have committed nearly Rs 20,000 crore in the Indian property sector in the past year and a half.

Last week, the Saffron group announced an investment of Rs 186 crore in a Mumbai project of Parsvnath Developers, and an HDFC-sponsored fund invested Rs 250 crore in the Hyderabad project of the Mumbai-based Lodha group.

Mahindra Lifespace shares gained over two per cent (or Rs 9.70) to close at Rs 453.40 on the BSE.