Indian real estate is a hot target for Singapore’s sovereign wealth fund GIC, which this week signed a US$1.4 billion 50:50 joint venture with Brookfield India REIT (BIRET) to two large commercial office assets in Mumbai and Gurugram – hailed by the fund as “the first-of-its-kind partnership In India between a listed REIT and a global institutional investor.”
Kishore Gotety, Co-Head of Real Estate, Asia ex-China, GIC, added, “We expect growth in the India office sector to continue, driven by an established IT industry, increased focus by global corporations on digital adoption, and the availability of skilled talent. These acquisitions are testament to our confidence in the India office sector, as well as the wider Indian market, and will add to the diversification of GIC’s global office portfolio.”
Global SWF data shows that state-owned investors have directly pumped nearly US$13 billion into Indian real estate from 2016 to date with the office segment representing 45.4% of the total, followed by logistics (26.8%), and residential (11.7%), with the remaining 16.1% including hotel, retail and mixed portfolios. GIC is among the leading investors in the Indian real estate market with offices and logistics properties its main focus of interest.
The BIRET tie-up coincides with another acquisition: the US$141 million purchase of an information technology-special economic zone (IT-SEZ), Phoenix Aquila, in Hyderabad's Gachibowli district from Phoenix Group. According to the Economic Times, the deal includes two towers next to Amazon’s operational campus, the first of which has been built and leased.
GIC entered into a forward purchase agreement in 2021 to buy the second block, which was then under construction and is now completed. According to the newspaper, GIC has also emerged as the frontrunner to acquire Allianz and Shapoorji Pallonji Group entity's joint asset, IT special economic zone Waverock, in Hyderabad for INR20 billion (US$242 million) – close to Phoenix Aquila.
Meanwhile, in one of the biggest single transactions in the Indian retail sector, earlier this month GIC sold its 50% stake in R City Mall in Mumbai’s Ghatkopar suburb to its joint venture partner Runwal for INR10 billion (US$122 million), representing a 4x return on its original investment.
Runwal and GIC partnered to develop the mall in 2006 in what was one of the first big foreign investments in the Indian retail real estate sector, with the Singaporean sovereign fund stumping up INR2.5 billion.
GIC’s strategy towards Indian real estate involves forming alliances with local and international realty firms and REITs. For instance, last year it formed an 80:20 strategic partnership with ESR to establish a US$600 million joint venture to acquire income-producing core industrial and logistics assets in India.
The “Core JV” represented an extension of a partnership between the two, which was initiated in 2020, with the initial US$750 million capital pool dedicated to investing in development and value-add logistics and industrial opportunities across India.
Another headline-grabbing deal by the Singaporean investor came in 2017 when it bought a third in DLF’s rental arm, DLF Cyber City Developers Ltd (DCCDL), for INR89 billion (US$1.39 billion).
