BANGALORE|MUMBAI: Mahindra Lifespace Developers, the real estate development business of the Mahindra Group, has bought a 12-acre land parcel in Gurgaon from private equity fund Ireo for Rs 472 crore, people with knowledge of the matter said.
"The project is to be developed by the joint venture that Mahindra Lifespace has with Standard Chartered Real Estate, the private equity arm of Standard Chartered Bank," Mumbaibased Mahindra Lifespace Developers said in a an email response to ET's query on the deal. It, however, did not comment on the deal size.
Ireo is one of the largest private equity funds committed to the Indian real estate sector. Its vice-chairman and managing director, Lalit Goel, did not respond to calls and text messages sent by ET.
Last year, Mahindra Lifespace had formed a joint venture with SCM Real Estate (Singapore), the investment arm of Standard Chartered Bank, for development of residential projects in India. Both companies plan to develop projects through Watsonia Developers, in which Mahindra Lifespace and SCM hold equal stakes.
"Designs have been completed for a premium project and the company is awaiting approvals for the same," Mahindra Life Space said. It refused to share the financial details. Private equity funds have started investing more in India's real estate sector after 2012. The increased inflow is good news for cash-strapped builders.
According to real estate consultancy firm Cushman & Wakefield, total inflows from private equity funds in the real estate sector for 2013 stood at Rs 7,000 crore, up 13% from the previous year.
"The residential asset class continues to provide tremendous potential for growth in the coming years. With housing requirements growing across cities and funds investing in the asset class primarily in the form of NCDs providing fixed returns, investments in the right project have the potential to yield healthy returns," said Sanjay Dutt, executive managing director, South Asia, at Cushman & Wakefield.
According to Mahindra, the first two projects under Watsonia Developers will be premium residential developments in Gurgaon and Bangalore. All projects developed under the joint venture will be marketed under the Mahindra Lifespace brand.
Mahindra has presence in nine cities with a pipeline of 11.3 million sq ft of ongoing and upcoming projects. This includes 1.55 million sq ft that will be developed by the joint venture through its first two projects at Gurgaon and Bangalore.
Ireo, which has a 4,500-acre land bank, has 19 million sq ft of residential and 4 million sq ft of commercial projects at various stages of development at prime locations in the National Capital Region, Tamil Nadu, Haryana, Punjab, and Maharashtra.