Mahindra Lifespace goes solo in Chennai realty JV with Arch

Mahindra has decided to go solo on its much touted premium realty project in Chennai for which the Mumbai-based diversified conglomerate had floated a joint venture (JV) company in 2008 along with private equity firm Arch Capital and Mahindra Residential Developers. According to sources, though the first phase of the project has already been completed, the remaining would be done solely by Mahindra. CNBC-TV18's Ronojoy Banerjee reports.

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Over the last few years, Mahindra has gone out and bought stake of their JV partners. In 2010, they bought out the stake Renault in the Logan project. Recently, they bought out the stake of Navistar in their commercial vehicle business and now a similar pattern seems to be spanning out as far as the real estate business is concerned.
In 2008, Mahindra Lifespace Developers had floated the joint venture company, which was 51 percent owned by Mahindra. The remaining 49 percent was owned by private equity firm Arch Capital, which is an affiliate of ILR Corporation, one of the largest real estate companies of Philippines.
Three weeks ago, Mahindra bought out the entire stake of Arch Capital in the joint venture (JV) company. According to company sources, the stake valuation was somewhere around Rs 70 crore and the first phase of that project had been completed by the JV firm and the remaining phases would be completed by Mahindra alone.
A spokesperson for the company confirms the development. She said that the special purpose vehicle (SPV) will now be 100 percent owned by Mahindra. She also said that 40 percent of the apartments and 70 percent of the villas have already been sold, but there was no comment on the final stake valuation of Arch Capital in the JV firm.