Max Estates Ltd, a wholly-owned subsidiary of a Max Group firm Max Ventures & Industries Ltd (MaxVIL), will enter into residential development in Delhi-National Capital Region (NCR) and invest Rs 1000 crore in acquiring land as well as signing joint development deals, said a top company executive.
“So far, we have mainly done commercial office projects, but now we will also start developing residential projects. There are few trusted developers in NCR today and we can scale our business, without any debt. There is space for a good quality developer,” Sahil Vachani, MD and CEO of MaxVIL), said in an interview.
For its residential projects, the company will focus on Delhi, Gurugram and Noida, and is looking to acquire 2-3 land parcels through outright deals, joint development and joint venture agreements. It is in advance discussions with nearly half a dozen landowners to acquire and develop prime land parcels in Delhi-NCR.
The decision to enter the residential sector comes after MaxVIL on Sunday said in a stock market disclosure that it has entered into an agreement with existing Japanese partner, Toppan Inc., in Max Speciality Films Ltd (MSF), to divest its remaining 51% stake in the specialty packaging films business for an enterprise valuation of Rs 1350 crore. With the stake sale, the company gets around Rs 600-650 crore in equity.
Post transaction, MaxVIL, which operates across two businesses – real estate in NCR and specialty packaging films business, will exit from its non-core businesses and completely focus on real estate.
MaxVIL's board has also authorised its investment and finance committee to explore ways for restructuring with its wholly owned unit Max Estates and rename the restructured company into Max Estates to bring better synergies between the name and the operations of the company.
Max Estates, which has developed a villa project in the past, plans to now develop, low rise, high-rise, plotted and mixed land use development. It also plans to do mixed-use projects that will include retail as well as senior living. Max Group's subsidiary ‘Antara’ already does senior living projects.
“By March, we will add 2-3 residential projects. We already have two office projects under construction and will continue to expand our commercial portfolio. We are also optimistic about residential demand going forward,” Vachani added.
New York Life Insurance Company, a partner of the Max Group, is a strategic investor in the company, owning about 23% stake. Additionally, it has also invested at the project level, through the special purpose vehicles route, by picking up a 49% stake in Max Square, a commercial project on the Noida-Greater Noida Expressway. The company said it will continue to look for such strategic or financial partners to back its expansion plans.