SINGAPORE - Singapore sovereign wealth fund GIC is investing US$1.4 billion (S$1.9 billion) in a landmark joint venture with India's leading real estate developer in a portfolio of office and retail assets across India.
In a statement on Sunday (Aug 27), GIC said it was one of the largest equity deals ever done in Indian real estate.
The transaction will create one of the leading platforms for rental properties in India, with rent yielding assets in some of the nation's main cities, totalling 26.9 million square feet.
Another 2.5 million sq ft is under development, with further development potential of about 19 million sq ft within the portfolio.
GIC said the partnership with DLF unit DLF Cyber City Developers "enables sustainable, long-term growth of DCCDL's rental business and creates an optimum structure for its rental business to improve efficiency, with long-term capital for growth of the portfolio".
"We are excited to enter into, yet another, landmark transaction with GIC," said Mr Rajiv Singh, vice chairman, DLF.
"We expect this partnership to unlock significant embedded value in this portfolio and achieve scale and growth to unprecedented levels", he added.
Mr Lee Kok Sun, chief investment officer, GIC Real Estate, said: "We are pleased to enhance our existing partnership with DLF, one of India's leading real estate developers, through this landmark transaction.
"This portfolio comprises high-quality, income-generating assets which are located across India's top-tier cities. In addition, there is significant development potential within the portfolio.
"As a long-term investor, we believe in the growth potential of India and in strengthening
relationships with like-minded partners."
The transaction envisages an enterprise value of Rs 35,617 crore (about US$ 5.6 billion) for DCCDL. Post completion of series of steps as contemplated in the transaction, 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.
The gross proceeds to the sellers from the transaction will be Rs 11,900 crore (about US$1.9 billion), which comprises secondary sale of equity shares to GIC for about Rs 8,900 crore (about US$1.4 billion), and two buybacks of CCPS for Rs 3,000 crore (about. US$500 million by DCCDL. The first will be done before the deal is closed and and the second will be done 12 months later.