Ayala to develop Indian housing project

Arch Capital Asian Partners L.P, a real estate private equity fund of the  Ayala Group, has teamed up with the Mahindra Group of India to develop a gated residential community in the southern Indian city of Chennai.

Based on its disclosure filed with the Philippine Stock Exchange, Ayala Corp. said Arch Capital and Mahindra will form a joint venture company to be called Mahindra Residential Development Ltd., which will be 51 percent owned by the Indian firm and 49 percent by an Arch Capital-controlled investment vehicle.

Arch Capital recently raised $330 million from a fund-raising activity. 

The project will sit on 55 acres of land within the 1,500-acre Mahindra World City in Chennai, considered as the country’s fourth largest metropolitan city. It will have 750 residential apartments with sprawling green space and large community interaction zones apart from retail and recreational facilities.

“The Indian market is very attractive and we see many opportunities for joint development and partnerships in the future not only in residential real estate development but even in high-growth areas such as business process outsourcing. We continue to see good growth prospects in India and we are delighted to have the opportunity to participate in this momentum through our partnership with Mahindra Group,” said Ayala Corp. president and COO Fernando Zobel de Ayala.

The addition of a world-class residential community, backed by the considerable experience and track record of the Ayala Group in large-scale residential township developments, underpins Mahindra World City’s status as a unique and a preferred destination for business and investment in India.

Mahindra World City, a joint venture between the Mahindra Group and the Tamil Nadu Industrial Development Corp. (TIDCO), has three sector-specific special economic zones  for information technology, auto ancillaries and apparel and fashion accessories.

Several private equity funds including CitiGroup, Blackstone and Kotak have been investing in Indian real estate, banking on returns in excess of 25 percent.

Ayala International and property giant Ayala Land own a combined 65 percent of Arch Capital Management.