Blackstone, GIC shortlisted for DLF's rental arm stake

NEW DELHI • Blackstone Group and sovereign fund GIC were shortlisted to purchase a 40 per cent stake in the rental property arm of DLF, India's largest listed developer, people with knowledge of the matter said.

The funds were chosen to proceed in the bidding for the interest in DLF Cyber City Developers being sold by DLF chairman  Kushal Pal Singh's family, according to the sources. 

The holding could fetch more than 100 billion rupees (S$2.1 billion), the sources said, asking not to be identified as the information is private. 

DLF Cyber City owns about 26.8 million sq ft of leased commercial real estate, including offices and malls in Kolkata and the area around the Indian capital, according to an analyst presentation on Aug 29.

Mr Singh's family may consider splitting the stake between the two suitors, one of the sources said.

The family received "multiple bids" in June for its stake in the commercial-property unit, the company said in its August earnings presentation.

 The developer had net debt of 221.2 billion rupees at the end of June, the company said.

According to reports in Indian media, a consortium of Kotak Realty Fund, Abu Dhabi Investment Authority and Qatar Investment Authority was also believed to be in the race.

GIC declined to comment in a statement sent by e-mail.

Representatives for Blackstone and DLF did not respond immediately to requests for comment. 

DLF has partnered with GIC and Blackstone in the past. GIC invested in two DLF residential projects in central Delhi last year, while a Blackstone unit has held stakes in seven of the Indian developer's housing projects.

GIC has been adding to its real estate holdings, buying a building next to Tokyo Station last year in a bet on rising property values in Japan's capital, Bloomberg reported.

It also purchased Blackstone Group's 50 per cent stake in London's Broadgate office complex in 2013 and, subsequently, was part of a group that acquired the headquarters space of Time Warner in New York City for US$1.3 billion (S$1.8 billion).

The London-based Sovereign Wealth Centre puts GIC's total holdings at US$343 billion, making it the world's sixth-biggest sovereign wealth fund.

A host of other Indian real estate companies such as Raheja and Prestige are also looking to sell stakes in their rental arms, Business Standard reported last month. Raheja is in talks with investors such as Warburg Pincus and Temasek Holdings, it added.

A version of this article appeared in the print edition of The Straits Times on October 15, 2016, with the headline 'Blackstone, GIC shortlisted for DLF's rental arm stake'. Print Edition | Subscribe