Country Garden, one of the top three developers of townships in China, is closing in on a deal with Chennai based property developer TVH for purchasing a 60 ground (one ground encompasses approximately 2,400 sq. ft.) plot in the prime residential zone of Kotturpuram. The land was originally a part of the Adyar Villa property spread over 18 acres which was owned by the family of noted industrialist A C Muthiah.
TVH purchased this plot for almost INR 120 crore in the year 2009 and the Adyar Villa is a major landmark in the locality, situated near the Adyar River. According to sources, Country Garden has been planning to enter the Indian real estate market and is close to buying this plot at the moment. The deal may have two parts, i.e. close to INR 220 crore in cash and also a stake for TVH in the development of the plot.
TVH may be the local partner for Country Garden for this project in Chennai and will help in obtaining approvals and clearances from government agencies. The project may be jointly promoted (not a joint venture) through an SPV (Special Purpose Vehicle) and TVH may get close to 20% of the development. Country Garden is based in Guangdong and had recently stated that it was planning to venture into the Indian market. The president and executive director of the company, Mo Bin, had earlier stated that the company is eager to seal its first ever realty deal in India by the end of this year. The Indian population has crossed even China and the country’s economic growth is the fastest across the globe while urban development lags by at least 10 years in comparison to China as per Bin’s statement.
The company has already been setting up its Indian headquarters at Gurugram and regional offices at Bangalore, Kochi, Mumbai and Chennai. The company is also in discussions with some Indian real estate developers in Mumbai, Delhi and Bangalore. TVH, which is owned by ex-transport minister and DMK member K N Nehru’s family, originally wished to develop a multi-storied residential project on the plot. However, the frontage for this land parcel did not adhere to the required criteria for promoting a multi-storied building. The road was widened when the DMK held the reins of power in the state.