Singapore's sovereign wealth fund GIC, has bet highly on Indian real estate in the recent months.
GIC, which manages assets worth $100 billion globally, has invested or committed Rs 2,500 crore in the many deals it has done in the past six months.
GIC is ahead of Blackstone, another prolific global investor in Indian real estate, which has reportedly done deals worth about Rs 1,500 crore in six months.
Abu Dhabi Investment Authority (ADIA) and Canada Pension Plan Investment Board (CPPIB) are also active in the sector, GIC does deals on its own besides "platform deals" with developers, says the head of a US-based private equity (PE) fund, on condition of anonymity.
"ADIA and CPPIB do not desire to create large teams in the country, whereas GIC has a large one in India and is doing deals on its own," he adds.
The PE fund head adds GIC has been following a strategy similar to Dutch pension fund APG, ADIA and CPPIB - all these focusing on diversified assets such as office properties and residential projects, besides lending to developers.
GIC Real Estate, headed by Kishore Gotety, who has worked with the Deutsche Bank group and ICICI Venture in the past, has announced three joint ventures in three months.
In September last year, GIC announced a joint venture with the Bengaluru-based Brigade group to invest Rs 1,500 crore in residential developments.
It followed up with two joint ventures with the Delhi-based Vatika group, to develop two residential projects in Gurgaon. In December, it acquired BSE-listed Nirlon that owned an information technology park at Goregaon in Mumbai for about Rs 800 crore.
This month, it tied up with PE fund KKR to set up a non-banking financial company to lend to real estate developers.
"We have expressed our strategy of building long-term partnerships with leading market players with good records, so we can leverage on one another's strengths," says a GIC spokesperson in response to a detailed questionnaire by Business Standard.
Although GIC has invested in Indian real estate since 2007, in the earlier years it did smaller deals such as an equal joint venture with Runwal Group for a mall in Mumbai, jointly buying land with the Bengaluru-based Brigade group.
"Between 2007 and 2012, smaller deals were the flavour of the day. Now, GIC seems to focus on large platform deals," says the PE head cited above.
A senior executive who has worked with fund houses such as ICICI Venture in the past says GIC's focus on Indian real estate has also to do with the fact that its chief operating officer, Goh Kok Huat, has spent time in this country as head of TSI Ventures. This is a joint venture between ICICI Venture and US realty developer Tishman Speyer. And, as chief executive officer of Ascendas India, which owns IT parks in the country.
Sanjay Dutt, managing director of Cushman & Wakefield, says GIC is a late entrant in Indian office property. "As a well-informed investor, they should have entered two years ago. Ascendas, also from Singapore, did so," he says.
Late Entrant
Sanjay Dutt, managing director of Cushman & Wakefield, says GIC has been a late entrant in Indian office properties. "As a well-informed investor, they should have entered two years ago. Ascendas, which is also from Singapore, did it," says Dutt.
Blackstone has invested about $2 billion in office assets in the past couple of years, becoming the biggest owner of such properties. It is believed to be the first one to float a real estate investment trust (Reit) and exit its investments if the government clears tax sops for Reits.
According to Dutt, although a bit late, GIC has made some good investments in Indian real estate.
Another PE fund executive points out that while GIC has been scouting for deals in India for quite some time, it could close deals only recently.
"Earlier, they (GIC) invested in funds managed by HDFC; now they are forging direct relations with property developers," he adds.
GIC'S INDIAN REALTY BET
-
November 2013: Sets up a joint platform with Ascendas to invest in Indian office properties
-
September 2014: Sets up a Rs 1,500-crore joint venture with Bengaluru-based Brigade group
-
December 2014: Sets up two joint ventures with the Vatika group for residential projects
