Mahindra Lifespace Aims for ₹8,000-10,000 Crore Bookings by FY28, Driven by Residential Pre-Sales
Mahindra Lifespace Developers' MD and CEO Amit Kumar Sinha expects the company to achieve bookings of ₹8,000-10,000 crore by 2027-28, with a strong focus on residential pre-sales. The company is also expanding its industrial parks project in Tamil Nadu wi
Mahindra LifespaceResidential PresalesIndustrial ParksSumitomo CorporationReal Estate InvestmentReal Estate NewsNov 27, 2024
Mahindra Lifespace's subsidiary, Mahindra World City Developers, recently announced the second phase of its industrial parks project in Tamil Nadu. This expansion is being carried out in partnership with Japan's Sumitomo Corporation, with a 60 40 ownership structure for both phases.
In an interview, Sinha elaborated on the shareholding and investment details for the second phase of the project. 'We already have a partnership with Sumitomo Corporation for the first phase of our Origins Chennai industrial park, and the shareholding is currently 60 40. This ratio will remain the same for phase two. We have earmarked ₹225 crore as the initial investment for land acquisition, which will be in the same ratio as our shareholding. Significant additional investments will be made over the next few years for infrastructure development, including roads, sewage treatment plants, and other essential structures to support corporate and multinational clients,' he stated.
When asked about the commercial prospects and annuity income from the industrial parks, Sinha clarified, 'These are not rental incomes but perpetual leases, which are considered as sales. We do, however, have a small annuity income from the operations and maintenance (O&M) business, where we maintain the parks and collect annual charges similar to common area maintenance (CAM) fees in residential properties.'
Sinha also highlighted the robust pipeline of Japanese investments, with significant deals already in place. 'Last year, Mitsubishi invested roughly $220 million in Origins Chennai, setting up one of their largest factories. We have a healthy pipeline of both Japanese and non-Japanese clients, and the partnership with Sumitomo is crucial for our growth in this sector.'
Regarding the approval process and commercialisation timeline, Sinha mentioned, 'The approval process for the industrial park is underway and typically takes six to nine months. We are simultaneously attracting companies to conduct due diligence and plan their constructions. The commercial numbers are currently confidential, but we will share them once the deals are finalised.'
Additionally, when queried about the company's plans for raising funds, Sinha revealed that they are exploring various options, including qualified institutional placements (QIPs) and preferential allotments. 'While REITs are more relevant for commercial properties with rental annuities, we are looking at platforms like QIPs and preferential allotments to raise capital for our residential projects, which are expected to contribute ₹8,500 crore to the overall booking target,' he explained.
The company has also been proactive in expanding its residential business through joint development agreements (JDAs). One notable example is the recent JDA in Bhandup, which will develop a mixed-use project of nearly 4 million square feet, including residential, commercial, and retail spaces. 'We are consistently growing our residential business while maximizing value creation from our industrial operations,' Sinha concluded.
Mahindra Lifespace Developers, with a market capitalisation of ₹7,487 crore, has seen its shares decline by 7% over the last year. However, the company remains committed to its growth targets and strategic expansions.
About Mahindra Lifespace Developers
Mahindra Lifespace Developers is a leading real estate company in India, known for its sustainable and integrated townships. The company's focus on residential, commercial, and industrial projects, coupled with strategic partnerships and innovative funding solutions, positions it as a key player in the real estate sector.
Frequently Asked Questions
What is Mahindra Lifespace's booking target for FY28?
Mahindra Lifespace aims to achieve bookings of ₹8,000-10,000 crore by FY28, primarily driven by residential pre-sales.
What is the ownership structure of the second phase of the industrial parks project in Tamil Nadu?
The second phase of the project in Tamil Nadu is a joint venture between Mahindra World City Developers and Sumitomo Corporation, with a 60:40 ownership structure.
What kind of income can be expected from the industrial parks?
The industrial parks generate lease income from perpetual leases, which is considered a one-time sale revenue. There is also a small annuity income from operations and maintenance (O&M) services.
What are the key strategic initiatives for raising funds?
Mahindra Lifespace is exploring options such as qualified institutional placements (QIPs) and preferential allotments to raise capital for its residential projects, while REITs are more relevant for commercial properties.
What is the timeline for the commercialisation of the new industrial park phase?
The commercialisation process typically takes six to nine months, including the approval process and due diligence by potential clients.
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