The company’s immediate priority is to build smaller industrial parks, Mahindra World City CEO Sangeeta Prasad said.
Mahindra World City, a unit of property developer Mahindra Life Space, has already chalked out plans to set up industrial parks in Gujarat and Andhra Pradesh.
Mumbai: Mahindra World City Developers Ltd, which has built two integrated business cities in Chennai and Jaipur of 1,500 acres and 3,000 acres, respectively, will build its next cities in smaller formats of 300 acres each, a top company executive said.
The company’s immediate priority is to build smaller industrial parks which the company internally calls “World City Lite”, Sangeeta Prasad, chief executive officer of Mahindra World City said. It will also expand the industrial land area within its Jaipur township.
Under the new business plan, the company is also reworking the master plan of its seven-year-old Jaipur township to expand the space alloted to domestic tariff areas (DTAs) to 1,000 acres from the earlier planned 500 acres while reducing the residential area. The strategy is in line with the company’s plan to cater to growing demands from firms which are looking to set up facilities in India.
Unlike a Specific Economic Zone, which caters to companies that are primarily export-oriented, DTA allows companies to set up facilities in India and cater to the domestic market.
Mahindra World City, a unit of property developer Mahindra Life Space, has already chalked out plans to set up industrial parks in Gujarat and Andhra Pradesh. Unlike its townships, the industrial parks will have more dedicated industrial area, and less of residential and social zones in it.
“We had signed a Memorandum of Understanding (MoU) with the Andhra Pradesh government last year and we are exploring the possibility of setting up an industrial park there. We also got in-principal approval to start an industrial park in Gujarat few years ago and we are actively looking in Maharashtra as well,” Prasad said.
In 2011, the company had entered into two MoUs with the Gujarat government to set an integrated township and an industrial park.
She said while land aggregation for the industrial park has already started in Gujarat, it is currently scouting for an appropriate location in Andhra Pradesh. She, however, did not disclose further details on the location as well as the investment the company is likely to put in on setting up the industrial parks.
Last year, the company formed a joint venture with Tokyo-based Sumitomo Corp. to launch a 300-acre industrial park in North Chennai. The venture is investing nearly Rs.400 crore in the project which it plans to launch by early next fiscal. After the Chennai park, Gujarat is next, Prasad added.
“Typically, if you look at the large World-City like formats, it is a play of about seven to 10 years, while in the smaller industrial park, it is around three to five years. Apart from Make in India, setting up industrial parks makes lot of business proposition at the moment when India is seeing a lot of investments coming in,” said Nirav Kothary, head of industrial services at JLL India, a property consultant.
Prasad said the company is open to entering into partnerships with investors “who have been strategic investors in the space, who is patient and who is here for the long haul” to set up its industrial parks.
“We are constantly reviewing what the market demand is and trying to align our products accordingly. Though we were there much before the government’s Make in India initiative, it does help in generating interest among investors. Initial enquiries (of buying or leasing land) have started. People are coming in and visiting our sites,” she said.
The Chennai World City, the company’s first township, is almost fully leased out with just about 40 acres left in the industrial zone. It currently houses 64 companies, with three upcoming residential projects in it.
On expanding the domestic tariff area in Jaipur World City, she said the company has seen a heightened interest in buying land in the DTA to cater to the domestic market. “After evaluating the market, we saw that the speed of transaction in the DTA is growing fast and we realise that we will lose the opportunity of getting more customers in the DTA if we don’t enhance the capacities,” she added.
The Jaipur World City currently has 67 companies.
Mahindra World City to build its next cities in smaller formats
