Tata Housing-Macquarie JV yet to invest any money

Deployment of funds by the Macquarie and Tata Housing joint venture (JV) is delayed by almost a year due to various issues, said a source involved in the venture.

 

Macquarie Infrastructure and Real Assets (MIRA) and Tata Housing entered into a 70:30 partnership last year, where MIRA was to put in Rs 1,400 crore and the remaining Rs 600 crore, of the Rs 2,000-crore fund, was to come from Tata Housing.

 

The plan was to infuse equity in Tata Housing’s premium and luxury projects in the top eight cities across the country over the next three to five years.

 

The JV had identified couple of projects in Mumbai and Thane for investment. “First there was change of guard at Tata Sons and then there was demonetisation. There were dumping-ground issue in Mumbai and pipeline issue in Thane which have been sorted now,” said the source. In October last year, Cyrus Mistry was sacked as chairman of Tata Sons abruptly. 

 

The government announced a ban on Rs 500 and Rs 1,000 notes in November last year which had hit the real estate badly, with sales coming to a standstill for the last two months of 2016.

 

In February last year, the Bombay High Court had banned all new constructions in the city and the Brihanmumbai Municipal Corporation to resolve the dumping-ground issue. “Then co-promoter issue in Rera (Real Estate Regulation & Development Act) had to be worked out,” the source said. A mail sent to Tata Housing did not elicit any response till the time of going to the press.

 

Though there was a buzz that the JV was called off, the source denied the development. R K Narayan, the managing director of MIRA had quit Macquarie in March and is currently working as an independent professional. Incidentally, Macquarie has also called off its plans to float a $ 500 million property fund for India, sources said. When contacted, a spokesperson for Macquarie said: “Macquarie would like to decline to comment this time, in line with Macquarie’s policy, they do not comment on speculative news.”

 

MIRA manages about $118 billion of assets on behalf of pension funds, sovereign funds, insurance companies and other investors. It manages nearly 50 funds across the world, largely regional funds.

 

Macquarie’s move comes at a time when investors such as US-based Blackstone, and Canada’s CPPIB (Canada Pension Plan Investment Board) and Brookfield have pumped in millions of dollars in Indian properties in the past couple of years.

 

Blackstone alone has invested over $3 billion in business parks and formed JVs with two real estate developers in Bengaluru and Pune. It recently picked up stake in rental arm of K Raheja Corp, one of the biggest office developers in the country.

The deal details

• Macquarie, Tata Housing entered into a 70:30 partnership last year
• Macquarie and Tata Housing were to invest Rs 1,400 crore and Rs 600 crore, respectively
• The money was to go into luxury projects of Tata Housing in top cities
• The JV had identified couple of projects in Mumbai, Thane to invest in
• R K Narayan, the MD of MIRA quit Macquarie in March
• Macquarie put off its plans to float a $ 500-million property fund
• Macquarie manages about $118 billion of assets on behalf of pension funds, sovereign funds, insurance companies and other investors across the world 
• Macquarie’s move comes at a time when Blackstone, CPPIB and Brookfield have pumped in millions of dollars in Indian properties in the past couple of years