Singapore’s GIC continues to team up with – or invest in – local developers as it increases its exposure to real estate across Asia-Pacific.
The sovereign wealth fund said it has taken a one-third stake in Indian company DLF Cyber City Developers and plans to co-invest in new a development project in Jakarta with PT Intiland Development.
The investment in DLF Cyber City values it at Rs35,617 crore (€4.65bn) and is said to be one of the largest private equity transactions ever in the Indian real estate market.
GIC said the investment was part of a “strategic partnership” with DLF Cyber City, a subsidiary of Indian developer DLF, and provides exposure to a 26.9m sqft existing portfolio and a 19m sqft development pipeline.
Lee Kok Sun, GIC Real Estate’s chief investment officer, said the assets are high-quality, income-generating and located in top-tier cities.
“In addition, there is significant development potential within the portfolio,” he said. “As a long-term investor, we believe in the growth potential of India and in strengthening relationships with like-minded partners.”
Rajiv Singh, DLF’s vice chairman, said the partnership would “unlock significant embedded value in the portfolio” and achieve “unprecedented” scale and growth.
Gross proceeds to the sellers from the transaction will be Rs11,900 crore (approx. US$1.9 billion). The deal with GIC will see a capital infusion of nearly Rs13,000 into DLF, due to take place by November.
The investment in Indonesia is GIC’s second in Jakarta with Intiland. GIC and Intiland will jointly develop the first phase of Fifty Seven Promenade, a mixed-use, high-rise development.
It comes four months after the partners begin building the South Quarter office complex in South Jakarta.
A GIC affiliate will own one third of the first phase of Fifty Seven Promenade. PT Raharja Mitra Familia (RMF), a subsidiary of Intiland, will hold a 36.63% stake, while another partner, PT Galang Gema Pradana, will hold the balance.
RMF will be the developer of the first phase of the project, comprising two condominium towers occupying an area of 1.3 hectares.
Prior to the joint venture agreement, RMF was 55% owned by Intiland and 45% owned by Galang.
Lee Kok Sun said: “We believe Fifty Seven Promenade, which is well located in the heart of Jakarta’s CBD, will be a significant residential development.
“We have worked with Intiland on the South Quarter project and look forward to more opportunities to work together as we tap the long-term potential of Indonesia’s real estate market.”