Macquarie and Tata Housing have entered into a 70:30 partnership, where MIRA will put in Rs1,400 crore and the remaining Rs600 crore will come from Tata Housing
Macquarie Infrastructure and Real Assets (MIRA), a part of Australia’s Macquarie Group Ltd, and realty firm Tata Housing Development Co. Ltd have agreed to jointly invest around Rs2,000 crore to develop high-end residential projects, two people familiar with the development said.
Macquarie and Tata Housing have entered into a 70:30 partnership, where MIRA will put in Rs1,400 crore and the remaining Rs600 crore will come from Tata Housing.
The transaction will also be the Australia-based investor’s first real estate investment in India.
“This is an equity investment platform, where the capital will be deployed over the next three years in four locations—Mumbai, National Capital Region, Bangalore and Pune,” said one of the people cited above, both of whom spoke on condition of anonymity.
MIRA is a large infrastructure asset manager globally and also has portfolios in real estate, agriculture and power across. Its growing real estate portfolio includes 290 retail, commercial, residential and industrial properties in China, Mexico and Australia.
A Macquarie spokesperson declined to comment.
Mint had reported in August that Tata and Macquarie were close to setting up a Rs2,000 crore platform.
“The capital will be used to buy land parcels as well as look at joint development opportunities,” said the second of the two people cited earlier.
MIRA and Tata Housing will develop projects where residential units will cost upwards of Rs75 lakh, up to Rs3 crore, depending on the city and the location.
Over the past few years, Mumbai-based Tata Housing has continued to build affordable housing projects, but its attention has veered towards including more premium housing projects in its portfolio—the transaction with Macquarie is testimony to that strategy.
Tata Housing sells premium and luxury homes in the Rs60 lakh to Rs14 crore range and currently has 19 projects. Under its True Value Homes brand, the developer sells apartments at an entry price of Rs16 lakh across cities.
Global investors have been actively seeking opportunities to have exclusive partnerships with developers in India, both in the residential and commercial office segments.
Despite the prolonged slowdown in the sector, investors are clearly not shying away from committing capital in the country’s real estate landscape. What they are looking at, though, is good quality realty firms to partner with, those who are believed to have strong corporate governance standards and are part of a larger corporate group.
For instance, in March, Mumbai-based Godrej Properties Ltd raised $275 million for Godrej Residential Investment Program II (GRIP-II), to invest in residential projects, from a clutch of investors, with Dutch pension fund asset manager APG Asset Management as the lead investor.
“There are many global funds including pension funds who are interested in these strategic alliances, but they want the right partner with the right strategy to commit capital. From a developer’s point of view, it opens up a single source of capital which he can use to develop a portfolio of projects. Discussions are on for more such deals,” said Diwakar Rana, managing director, capital markets, India, at Cushman and Wakefield, a property advisory.
Walls N Roof Comment: Tata Housing development Co. Ltd., a fully owned subsidiary of TATA sons, a holding company of TATA group, has become a reputed real estate developer over a period of time. Established in 1984, the company presently has projects in Mumbai, Gurgaon, Bhubaneshwar, Kolkata Lonavla , Bengaluru and Thane. Tata has also moved into green buildings with projects like Tata Serien located at Ghodbunder Road, Thane.
Macquarie Infrastructure and Real Assets (MIRA) is the world’s largest infrastructure asset manager. The joint venture of MIRA and Tata housing is much similar to the joint venture of Vihang Group and Godrej Properties project, Godrej Emerald. The land parcel was owned by the Vihang group and the development is being done by Godrej Properties. Such joint ventures are more likely to be implemented in the near future as the land parcel cost is very high and development of mega projects and townships become very difficult. The land parcels now require huge investment which can only be done by a financial institution or in certain cases, when the land was purchased much prior to development.