Singapore's GIC fund boosts investment in Indian real estate

GIC, Singapore's sovereign wealth fund, is boosting its presence in India by partnering with the country's largest real estate developer, DLF Ltd.

Singapore Picture for representation

The sovereign wealth fund of the Lion City continues its expansion in global markets with its recent strategic partnership with DLF Ltd., India's leading real estate developer.

GIC and the Indian developer is forming a joint venture to develop a rental assets portfolio under the consolidated portfolio of DLF Cyber City Developers Ltd. (DCCDL)

Also Read: Singapore's sovereign wealth fund acquires 16-acre site in India

According to DLF Ltd. Vice Chairperson Rajiv Singh, the deal allows for a sustainable growth of DCCDL's rental business and improves the subsidiary's efficiency.

"Going forward, we expect this partnership to unlock significant embedded value in this portfolio and achieve scale and growth to unprecedented levels," Singh said in a statement.

The transaction has an enterprise value of around US$5.6 billion for DCDDL. After the process, DLF Ltd will hold 66.66% stakes and GIC will hold 33.34% equity shares in DCCDL.

The gross proceeds from the transaction are expected to yield around US$1.9 billion. A portion of the proceeds will be invested back in the company.

This deal rose to become one of the largest private equity transactions in India in the real estate space

GIC Real Estate Chief Investment Officer Lee Kok Sun said in a statement that this is a landmark transaction for the fund as it partners with India's real estate powerhouse.

"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," he stated.

In a report from Straits Times, it was noted that this deal will pave the way for the creation 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.