Singapore sovereign wealth fund GIC is investing about US$1.4 billion (S$1.9 billion) in a landmark joint venture with India's leading real estate developer in a portfolio of office and retail assets across India.
In a statement yesterday, GIC said it was one of the largest equity deals ever done in Indian real estate. The transaction will create one of the leading platforms for rental properties in India, with rent-yielding assets in some of the nation's main cities, totalling 26.9 million sq ft, it added.
Another 2.5 million sq ft is under development, with further development potential of about 19 million sq ft within the portfolio.
GIC said the partnership with DLF unit DLF Cyber City Developers (DCCDL) "enables sustainable, long-term growth of DCCDL's rental business and creates an optimum structure for its rental business to improve efficiency, with long-term capital for growth of the portfolio".
DLF vice-chairman Rajiv Singh said: "We are excited to enter into yet another landmark transaction with GIC. We expect this partnership to unlock significant embedded value in this portfolio and achieve scale and growth to unprecedented levels."
Mr Lee Kok Sun, chief investment officer, GIC Real Estate, said: "We are pleased to enhance our existing partnership with DLF, one of India's leading real estate developers, through this landmark transaction.
"This portfolio comprises high-quality, income-generating assets which are located across India's top-tier cities. In addition, there is significant development potential within the portfolio.
"As a long-term investor, we believe in the growth potential of India and in strengthening relationships with like-minded partners."
Properties in the portfolio are spread across key Indian cities such as the Delhi National Capital Region, Chennai and Hyderabad.
DLF is one of India's largest property players. One of its successes is to have transformed Gurgaon into the economic hub of North India.
The transaction envisages an enterprise value of 35,617 crore (about S$7.6 billion) for DCCDL.
After completion, DLF will hold two-thirds equity shares (up from 60 per cent diluted equity earlier) and an affiliate of GIC will hold one-third equity shares in DCCDL.