L&T plans Rs 1500 cr township in Chennai

Larsen & Toubro Urban Infrastructure Ltd (L&T UIL), a division of Larsen & Toubro Ltd's subsidiary L&T IDP, has formed three special purpose vehicles (SPVs) to develop an integrated township with Chennai-based realty firm Arun Excello.

The township, christened Estancia, will be located at Vallancheri on GST Road in South Chennai, and is expected to be completed in three phases on a project outlay of Rs 1,500 crore within a four-year time frame, S Hariharan, general manager, L&T, said.

L&T UIL and Arun Excello, as equity holders, will jointly develop the entire project. The three SPVs will deliver turnkey construction, civil engineering and infrastructure development activity on the township's residential space, IT/ITeS facilities and retail zone respectively.

The first SPV will develop the residential zone comprising 2,000 apartments on around 3 million square feet spread over 37 acres of land, at a cost of Rs 700 crore, Hariharan told the media.

Arun Excello would hold a majority 67 per cent equity stake in the SPV, while L&T UIL would bring up the remaining 33 per cent, P Suresh, managing director, Arun Excello, said.

In the second SPV, Rs 600 crore has been parked to develop an IT park over 27 acres with 2.7 million square feet of office space.

The third SPV will develop a retail mall, hotel and serviced apartments over 1-million sft at a cost of Rs 200 crore on 11 acres of land. L&T would hold a majority 51 per cent stake in both SPVs, while Arun Excello will hold the remaining 49 per cent, Suresh said.

"We are looking at a debt-to-equity ratio in the range of 2.5:1 to 3:1 depending on the debt requirements of each SPV," Hariharan said.

Suresh said the first phase of the project involving all three SPVs, at a cost of Rs 600 crore, would have 700 residential apartments and was expected to be completed by March 2009.

While 78 acres of land has been acquired for the project at a cost of Rs 300 crore, both companies declined to furnish per acre cost details involved in the land acquisition, or price quotes per sft for the finished project. The project is scheduled for an April 14 launch.

L&T is currently working on developing the TCS facility at Sirusseri on Chennai's IT Corridor. Arun Excello has over 19 projects involving about 1,000 flats on a developed area of 1 million sft under its belt in Chennai.

It also delivered the complete civil work on the SSR International Airport project in Mauritius at a cost of Rs 65 crore, and constructed 20 radial gates over the Indira Sagar for the Narmada Hydroelectric Development Corporation at a cost of Rs 58.41 crore.