GIC to invest in two Delhi projects

DLF Home Developers and GIC are in a joint venture to develop two property projects in New Delhi.
DLF Home Developers and GIC are in a joint venture to develop two property projects in New Delhi.PHOTO: DLF HOME DEVELOPERS

S'pore fund to put $425m into property joint venture as it diversifies its portfolio in India

Singapore wealth fund GIC will invest 19.9 billion rupees (S$425 million) in a new joint venture with Indian real estate developer DLF that will build two projects in India's capital New Delhi.

The deal, announced by the two firms yesterday, is one of several GIC has mounted in India this year.

GIC earlier made investments in Bandhan Financial Services, which is setting up one of the country's two newest banks, and online taxi-hailing company Ola.

The statement did not specify the size of the stake GIC will take in the DLF joint venture. However, India's NDTV news outlet said DLF had sold a stake of about 50 per cent in the projects.

"GIC is confident in India's long-term growth potential and look forward to partnering DLF to tap into attractive opportunities of India's real estate sector," said Mr Loh Wai Keong, managing director and co-head of Asia for GIC Real Estate, the real estate arm of GIC .

"We hope to leverage our mutual strengths to grow this partnership with DLF and to collaborate on more projects in the future."

DLF said the venture - between its wholly-owned unit DLF Home Developers and GIC - is expected to benefit from GIC's experience in integrated developments.

"We hope that this investment is a beginning of a new relationship with GIC at the project level," Mr Saurabh Chawla, DLF senior executive director for finance, said. "Such project-level investments shall lead to unlocking of embedded value in many of DLF's development projects," he said.

DLF, which has 22 major residential projects under its belt to date, has been grappling with debt and reduced cash flow following the sluggish property market in India in the last three years.

Its share price jumped 4 per cent on the Bombay Stock Exchange yesterday after the venture was announced.

GIC, with more than US$100 billion (S$141.7 billion) in assets under management globally, has recently diversified its portfolio in India, investing in ventures ranging from taxi apps to commercial banking.

It has a stake in Kolkata-based Bandhan Financial Services, a microlender which only recently entered the mainstream banking industry with a start-up capital of US$386 million.

In April, GIC invested in Bangalore-based Ola taxi service in a funding round worth US$400 million. The deal placed Ola as one of the most valued local e-commerce companies in India, behind market leader Flipkart which also has GIC as its investor.

A version of this article appeared in the print edition of The Straits Times on September 03, 2015, with the headline 'GIC to invest in two Delhi projects'. Print Edition | Subscribe