Max Estates to jointly develop 18.23 acres land in Gurugram

NEW DELHI: Max Estates, the real estate arm of the Max Group, has executed binding agreements for a potential group housing residential development on 18.23 acres of land with gross development value (GDV) estimated at over Rs 9,000 crore in Gurugram at the back of ~4 million sq ft of development area.

This land parcel is contiguous to its existing 11.80 acres of land on Dwarka Expressway in sector 36 A, Gurugram on which Max Estates had done a joint development agreement (JDA) last year.

Both opportunities imply a combined GDV potential over time of over Rs 13,000 crore by developing and selling an area over 6.4 million sq ft.

Rishi Raj, COO, Max Estates said, "This is integral to our stated growth strategy of securing at least 2 million sq ft of development opportunity in Delhi NCR every year. Post closure of this transaction, the portfolio of Max Estates will grow by 50 per cent from 8 to 12 million sq ft of development potential."

The binding agreement envisages securing development opportunity through JDAs over three tranches and undergoing the process of securing license under transit orient development (TOD) policy in collaboration with the landowner.

The company recently signed a memorandum of understanding (MoU) with New York Life Insurance Company (NYL) for investment in Max Towers (MTPL) and Pharmax Corporation (PCL), wholly-owned subsidiaries of the company.

NYL will subscribe to 1,07,89,330 equity shares to be issued by MTPL for an aggregate consideration of approximately Rs 565.25 million and acquire 2,63,76,841 equity shares of MTPL, from the company for an aggregate consideration of approximately Rs 1,381.88 million.

NYL will also subscribe to 74,48,814 equity shares to be issued by PCL for an aggregate consideration of approximately Rs 347.56 million and acquire 3,40,64,700 equity shares of PCL, from the company for an aggregate consideration of approximately Rs 1,589.46 million.

Upon the consummation of the transaction, NYL will hold 51% and 49% of the share capital of MTPL & PCL, respectively, on a fully diluted basis.

The board of directors recently approved corporate guarantee of Rs 4500 million for availing the financial facilities by Max Estates 128, a wholly-owned subsidiary of the company from Standard Chartered Bank and Standard Chartered Capital.