New York Life Insurance Company is taking a 49% stake in a Max Group unit that’s building an office project in Noida.
The American insurer will invest Rs 85.74 crore ($12 million) for the stake in Northern Propmart Solutions Ltd, Max Ventures & Industries Ltd said in a stock-exchange filing.
Northern Propmart is a unit of Max Estates Ltd, a wholly owned subsidiary of Max Ventures and the real estate arm of Max Group. Max Estates will own a 51% stake in the unit.
The cumulative investment by Max Estates and New York Life in Northern Propmart will be Rs 175 crore after the transaction is completed.
The transaction extends the partnership of Max Group and New York Life. In 2017, New York Life had picked up a 22.51% stake in Max Ventures for Rs 121 crore. In 2001, New York Life and Max Group had teamed up to set up an insurance joint venture. New York Life sold its stake in the joint venture in 2012 to Mitsui Sumitomo Insurance Co. Ltd.
Max Group has been focusing on its real estate vertical after restructuring its business in 2016. In 2017, it acquired under-construction commercial project Max Towers from BPPL, a 3C Group company. The project has been completed and leasing activity has started, as per a presentation by the company. It has also started construction of another office project, Max House, in Delhi’s Okhla.
With the latest addition in Noida, the company has three commercial and one residential projects in its portfolio.
Max India Ltd, another group company, said last year it expects to enter areas related to the group's current businesses of life insurance, real estate, senior care and hospitality. “Our aim is to recreate the Max India story all over again by seeding high potential businesses and doing them the Max way, which will likely create significant value for those who stay invested with us," founder and chairman Analjit Singh had said at the time.
While real estate as an asset class has been struggling, commercial and rent-generating properties have been doing well. Given the momentum, a lot of developers have switched focus and launched projects in the segment. Global investors such as Blackstone have also ramped up their investments in the segment and bought assets aggressively.