contactDiary Integrated City Industrial Cluster

'Smart City’ built by India’s Mahindra Group, Ssangyong Motor’s major shareholder

There are tree-lined roads after the 90-minute drive from Chennai City, in the Tamil-Nadu state of Southern India. Through the trees, buildings with foreign firms’ logos - such as BASF, Fujitec, Renault Nissan, BMW, and also India’s representative IT firms such as WIPRO, Infosys – catch the eye. Further on, there are pastel-toned, middle story apartment complexes. It seems similar to new cities around Seoul and the capital area.

This is ‘Mahindra World City Chennai’ and it contradicts many preconceptions about Indian cities. Mahindra World City is an environmentally friendly smart city which Mahindra Group’s real-estate business ‘Mahindra Lifespace Developers’ is developing.

In India, smart cities are drawing attention and private companies are proactively joining hands with state governments to build mega cities with companies, residences and cultural and commercial facilities combined. India’s Prime Minister Narendra Modi, with his ‘Make in India’ campaign to promote manufacturing businesses, has promised to build 100 smart cities around India by 2022.

One of the representative models is ‘Mahindra World City.’ Mahindra Group established ‘Mahindra Lifespace Developers’ in 1994. It is wholly responsible for development work, and has been constructing new cities in Chennai and Jaipur since early 2000. Jaipur is the capital of the Indian state of Rajasthan in Northern India.

The scale is already overwhelming. Mahindra World City in Chennai is about 6,272,600㎡ - double the size of Yeouido in Seoul. Mahindra World City Jaipur is almost double the size of Mahindra World City Chennai - 12,140,570㎡. A source from Mahindra Lifespace Developers said, "By adopting public-private partnerships – PPP - which develop cities through joint ventures with state governments, it was easy to secure land, and to go through administrative procedures, such as licensing, quickly."

One of the biggest advantages of Mahindra World City is that it dramatically increases convenience for firms and residents. It aims to be a "one-stop city," that offers residents work, lifestyle, education and leisure and cultural activities in one place.

In most Indian industrial complexes, resident companies have to facilitate telecommunications networks, gas, electricity on their own, but in Mahindra World City, the only thing resident companies have to do is to pack and move in, because Mahindra Lifespace develops, operates and manages all of the infrastructure needed. Resident firms also can get various tax benefits. Income tax is exempted 100% for the first five years in Mahindra World City, and companies benefit from tax cuts for a maximum of 15 years. At one time, the government used to give incentives to companies to make them stay, but now Mahindra World City is filled with 60 companies. Mahindra World City Chennai has about 40,000 persons working in it.

[A panorama of India’s largest IT firm, Infosys, which moved in to Mahindra World City Chennai. 60 Indian and foreign firms have moved in. Photo source = Mahindra Lifespace]

Another charm of Mahindra World City is its clean residential environment. Mumbai, which is the No.1 economic city in India, suffers from severe polarization of living conditions. There, we can often see scenes like 'Guryong Village'(Insight Note: A shantytown in Korea) where tower palace (Insight Note: One of Korea’s tallest and wealthiest apartments) and hundreds of shacks stand in total contrast. On the other hand, the residential area in Mahindra World City consists of various types of houses, such as middle-story apartment buildings and European town houses. From single- and two-member households to more than four-member households, people can move into Mahindra World City. This is simply a new world that can’t be found in most cities in India. The city will eventually have 8000 resident households; as of now, 2000~3000 households are in situ.

Monthly rent for a three-room house is about 30,000 ~ 35,000 rupees (KRW 500,000~ 600,000) and the main target for these houses are India's middle class. There is also a community center with sport facilities and a pool. Mahindra Lifespace will unveil luxury premium houses soon, for high-income staffers in resident companies. Near the residential area, there are community facilities including shopping centers, elementary, middle and high schools and hospitals.

[Downtown Mumbai, the No.1 economic city in India. Old low-story houses and high-rise apartment buildings under construction behind them form a contrast. Photo source = Maekyung DB]

[Residential area in Mahindra World City Chennai. Just as pleasant as apartments in a new city in Korea. Photo source = Maekyung DB]

Mahindra Lifespace Developers are particularly proud of Mahindra World City as an environmentally friendly city, such as is rarely found in India. In fact, it is not easy to see refreshing green trees in India. But Mahindra World City is different. There are several high walls because of security, but Mahindra World City has lowered the height of other walls and planted trees. It has also planted trees on the sides of the roads. Because of this, the entire city looks like a huge, tree-lined road.

Also, the city is adopting several renewable energy systems including recycled water, solar power, bio, and natural gas facilities, to build an environment that is emission-free. Mahindra World City Chennai has received a certification for green buildings - a first in India - from an Indian, environment-friendly building committee.

[Mahindra World City Chennai. It’s difficult to find refreshing green trees in urban India but Mahindra World City is different.There are trees planted all over the space, so the whole city looks like a giant park. Photo source = Mahindra Lifespace]

Like Korea, pre-sale is the usual development model in India. One-dimensional ‘eat and run’ speculators that withdraw when construction is completed are common. But Mahindra Lifespace differs a lot that is different from other new cities. They didn’t just construct the city, but focused on sustainability since 2002, when they started the new city business, and are responsible for operation and management. Moreover, Mahindra Lifespace is decorating and developing the city, practicing Indian town management which used to be the exclusive property of developers in developed countries such as America and Japan. Mahindra Lifespace is also holding cultural and athletic events such as marathons, that all residents in Mahindra World City can participate in. Anita Arjundas, CEO of Mahindra Lifespace said, "Our ultimate goal is to develop Mahindra World City as a city where the residents can achieve work-life balance."

[Marathon held in Mahindra World City Chennai. Mahindra Lifespace Developers not only do construction, they also put efforts into management, decorating and developing the new city. [Photo source = Mahindra Lifespace]

Mahindra Lifespace will put efforts into vitalizing the commercial sphere, such as expanding commercial facilities in the very final stage of development. Mahindra World City Chennai offers accessibility that is on a par with the new cities of developed countries. It is only 35km away from Chennai Airport, but has relatively fewer shopping and cultural facilities compared to Chennai City.

What’s the forecast for the new city? Korea, with its low birthrate, aging society and low growth, is regenerating cities instead of developing new cities. However, India seems a bit different because their population has reached almost 1.3 billion and the young generation in their 20-30s have the biggest demands for housing. Prime Minister Modi, who is an icon of reform, enjoyed an overwhelming win in the state election of the northern state of Uttar Pradesh, which has the largest population among the 29 states of India - 200 million. A second term as prime minister seems likely, and people are evaluating India’s economic prospects as bright. Mahindra Lifespace Developers CEO Anita Arjundas said, "India’s main cities are suffering from housing shortages. There will be increasing demand for housing and commercial facilities."

Mahindra Lifespace is also pushing ahead with ‘HappiNest’ business - houses for low-income people. The CEO of Mahindra Lifespace Developers said, "The low-income housing business has a chance of success if we supply it efficiently."

[Chennai = Yim Young-shin]

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