Indian Billionaire Developer Mangal Lodha Enters London, Buys $500Million Trophy Property

Billionaire Mangal Prabhat Lodha

Mumbai-headquartered real estate developer Lodha Group, founded by billionaire Mangal Prabhat Lodha, announced Friday that it has inked a $500 million deal with the Canadian government to purchase Macdonald House in central London. The seven-story, 75-year old building, located at 1 Grosvenor Square in the heart of Mayfair, is named after Sir John A. Macdonald, Canada’s first prime minister and currently houses the Canadian High Commission.

Lodha’s purchase of this trophy property, after reportedly beating out bids from other Russian and Asian buyers including sovereign wealth funds, marks the group’s debut in London and indeed its first overseas expansion. In a press statement, Lodha’s son Abhinandan Lodha, managing director of the group elaborated on the deal: “We plan to focus on Mumbai and London as our two main markets and serve London in the same manner that we serve Mumbai – with world class products intended to serve all key market segments.”

Lodha has reportedly made the initial payment and has until March to conclude the deal, though it is believed that it may do so earlier by January. The group won’t be leaning on bank loans but rather marshalling its own internal resources. It has hired a senior banker to head the London arm and will be shortly opening an office at Chester Square in Belgravia.

In its home market, the developer which is run by the billionaire’s sons Abhinandan and Abhisheck, is best known for its iconic buildings such as the 117-story World One tower, billed as the world’s tallest residence, which is currently under construction and will feature apartments designed by Armani. The group has 30 projects covering 35 million square feet underway, more than any other developer in Mumbai, a market where property sales have lately stagnated.

Unfazed by the slump, the $1.7 billion (revenues) Lodha has been on a building binge and continues to lure buyers with its slick marketing campaigns. Its newest project The Park in downtown Mumbai, will have 6 high-rise towers including one that will be the city’s first Trump Tower. When I’d met Abhisheck earlier this year, he’d told me that they were aiming to create Mumbai’s landmarks that would be the subject of “future postcards.”

Macdonald House (Photo credit: Wikipedia)

Some real estate experts say Lodha’s overseas expansion is “unusual” in that few Indian developers have ventured abroad in a big way though a handful have projects in Dubai such as the billionaire Hiranandani clan and PNC Menon of Sobha Developers, both of whom feature among India’s richest. But Sandeep Kotak, founder of Mango Advisors, a Mumbai real estate consultancy, argues that entering London is a logical next step for Lodha. “ Their projects are global in nature attracting non-resident Indian buyers from across the globe and London is a dream destination for India’s wealthy. ”

A London home is regarded as a must-have among India’s affluent class. Billionaires such as construction magnate Pallonji Mistry, property baronKushal Pal Singh, brothers Shashi and Ravi Ruia and onetime billionaireVijay Mallya have lavish London pads. So do Bollywood stars including actors Shah Rukh Khan and Ajay Devgn.

Lodha is not the first Indian to splash out big bucks for a London trophy; in 2010, controversial businessman Subrata Roy, founder of Sahara India Pariwar, paid $600 million for the Grosvenor House Hotel though he has reportedly put that up for sale. Lodha is expected to develop the Mayfair property into luxury residences aimed at the uber-rich. Calling it “the world’s best address”, Abhisheck said in a statement that “ we will create a world class development which befits the status of this address. ”