India (Commonwealth) _ Brookfield India Real Estate Investment Trust and Singapore’s sovereign wealth fund GIC have teamed together to purchase commercial buildings in India, marking the first collaboration between a foreign institutional investor and a listed REIT in the nation.
According to a statement released on Friday, two Grade-A assets totaling 603,870 square meters and owned by New York-listed Brookfield Asset Management’s private real estate funds will be acquired by one of Asia’s largest sovereign wealth funds and the India-based REIT.
With the acquisition, the equal partnership will gain access to a number of office buildings, including Downtown Powai in Mumbai and Candor TechSpace in Gurugram.
Goh Chin Kiong, GIC’s deputy chief investment officer for real estate, stated, “This represents our first joint venture with a public REIT in India and will allow us to grow up our investments through this avenue. “We look forward to adding value to the assets, which are well located within key gateway cities,” he continued.
Our long-term strategy includes expanding and diversifying our India REIT portfolio through accretive deals. The inclusion of properties that are market leaders and the significant expansion of the REIT’s size excite us. Ankur Gupta, managing partner and head of real estate for Asia, stated that this special relationship “furthers our global partnership with GIC in India and reaffirms the quality of the portfolio we’ve built in the country.” Brookfield Asset Management’s Pacific.
After the deal, the gross asset value and net asset value of Brookfield India will increase to $3.5 billion and $2 billion, respectively. The REIT’s operating area will grow by 44%, while its total leasable space will rise by 35%.
As of May 19, Brookfield India has a market value of 91 billion rupees ($1.1 billion).
Through the deal, a GIC subsidiary will obtain a 33.34 percent share in DLF Cyber City Developers (DCCDL), a company that manages a portfolio of commercial properties totaling 26.9 million square feet (about 250,000 square meters) of rent-earning properties.
The agreement, in which the Singaporean fund has already made a number of investments, is one of the largest private equity transactions in the nation’s real estate industry. Having assets under control totaling more than $100 billion.
Initial interest in the sale is alleged to have come from up to 15 entities, but GIC prevailed against a group of investors that reportedly included a major US private equity firm and a coalition of the sovereign wealth funds of Abu Dhabi and Qatar. DLF hired Morgan Stanley and JPMorgan last year to provide advice on the sale of the shareholding, which was meant to deliver the balance sheet of the property giant.
The agreement is GIC’s second collaboration with DLF; in September 2015, the Singaporean firm established a joint venture with subsidiary DLF Home Developers to invest in two residential projects in central Delhi.
In India’s real estate market, GIC has been involved. From December 2014, when the fund collaborated with the Gurgaon-based Vatika Group to construct two residential developments. A controlling interest in Mumbai-based real estate company Nirlon was to be purchased by GIC for about $200 million in the same month.
The Ascendas India Growth Programme (AIGP), an S$600 million ($440 million) vehicle established in 2013 with Singapore’s Ascendas-Singbridge, also counts GIC as its primary investor. The collaboration announced in August of last year that it will invest $400 million to create an IT park in Gurgaon. And earlier this week, AIGP made its second investment in India by purchasing a 16-acre plot in the Pune suburbs that will be turned into a business park.
