India’s Mahindra Group has formed a joint venture with ARCH Capital Asian Partners, a private equity real estate fund run by Philippines-based developer Ayala Land, to develop a gated community on 55 acres within a Special Economic Zone built by Mahindra, Mahindra World City in New Chennai.
The joint venture company will be called Mahindra Residential Development. It will be 51 percent owned by Mahindra. It is planned to have 750 residential units along with community spaces and green areas.
Mahindra World City, developed jointly by the Mahindra Group and Tamil Nadu Industrial Development Corporation, is located on 1,500 acres in the outskirts of Chennai near Chengiepet. The development has three special economic zones, which operate as foreign territory for tax purposes, located within it. One is devoted to information technology, another to fashion and apparel and the other to auto ancillaries. Companies which have set up shop there include BMW, B Braun, Cap Gemini, Infosys, Mindtree, TVS Group and Renault Nissan. The development is expected to have a working population of 100,000 people by 2015.
Both companies declined to reveal how much they will be investing in the tie-up.
Ayala Land is controlled by the Philippines' richest family, the Zobel de Ayalas. The company tends to focus on hotels, upscale malls, residential condominiums and high-rise offices. The group launched ARCH, its first private equity real estate fund, in August 2006. The $200 million fund is based out of Hong Kong and is targeting emerging Asian markets outside Japan.