Mumbai: GIC, a sovereign wealth fund of Government of Singapore, has acquired 49 per cent equity stake in Provenance Land which owns India’s first Four Seasons Hotel and an under-construction luxury development in Mumbai’s sea-facing Worli locality. It is estimated that these equity shares are worth over Rs 1,000 crore.
Notably, this is the second large transaction of GIC in India. Earlier, it agreed to buy 33.34 per cent shares in DLF’s rental arm for around $1.4 billion last year. Apart from this, this is for the first time when GIC is transacting in mixed-use development including commercial, residential and hospitality properties, indicating the fund’s rising interest in these assets classes in India.
This development was reported by Economic Times for the first time when it said that GIC and Provenance Land were in advanced talks for the proposed transaction on July 18.
As per the information available, a commercial project will be developed by both the entities on a two-acre land property adjacent to the existing hotel and residential project site in Worli.
Jatia’s Four Seasons Private Residences Mumbai, currently under construction, will also be part of this transaction. This project will have 41 branded and service apartments, including duplexes and penthouses, spread over 64 floors. The existing hotel property is the only operating Four Seasons Hotel in India with 202 rooms. Through this transaction, GIC will also get an equity stake in the hotel.
Adarsh Jatia, MD, Provenance Land confirmed the partnership with GIC but declined to comment on the deal size.
Adarsh Jatia, MD, Provenance Land said, “This investment and partnership GIC marks a key milestone for us as it directly bears out the intent to expand quickly and strategically into new best-in-class developments and deliver on our vision. With this, we are well capitalized to take advantage of other opportunities.”. Both the entities may extend the partnership to other new projects too.
Of the total mixed-use project, Provenance will be developing around 7 lakh sq ft of grade A commercial space and 3 lakh sq ft of branded residences. The existing Four Seasons hotel will undergo refurbishment and renovation apart from addition to its room inventories.
This will entail a further $250 million investment from Provenance Land that now becomes a joint entity of GIC and Jatias. A wholly-owned Provenance Land subsidiary will be managing the development.
Lee Kok Sun, Chief Investment Officer of GIC Real Estate said, “As a long-term global investor, we continue to have a positive outlook in India’s growth potential in the long run. This investment is a unique opportunity to acquire a stake in high-end mixed-use development in a prime location of Mumbai. We believe the project will generate resilient returns in the long run.”
GIC entered Indian real estate market over a decade ago. However, has turned aggressive recently and has been actively picking up stakes in properties and forming alliances with Indian developers for future developments. Apart from the stake in DLF’s rental arm, GIC’s India real estate investment portfolio includes alliances with Godrej Properties, Bengaluru-based Prestige Estates and Brigade Enterprises. It also owns majority stake in 2.2-million-sq-ft commercial complex Nirlon in Mumbai’s Goregaon suburb.
Interestingly, in past few years, some Indian real estate assets have seen investment from big global conglomerates like GIC, Blackstone Group, Brookfield Asset Management, Canada Pension Plan Investment Board (CPPIB), Goldman Sachs and Qatar Investment Authority.
Apart from this, there are some funds which are looking forward for investment and alliance opportunities in the backdrop of recent policy reforms.
Notably, earlier these entities were looking forward to invest in the commercial real estate but after the opening up of avenue for monetization through Real Estate Investment Trusts (REITs), they are inclining towards it.