Backed by big deals, GIC ahead of western peers in office properties

Singaporean sovereign fund GIC seems to be going ahead of its Western counterparts in doing big deals in office properties here.

According to sources, GIC is in the final leg of three real-estate deals in the country. They relate to properties or significant stakes in portfolios of key investors.

GIC is in talks with Canadian investor Brookfield to buy 50 per cent of the latter’s assets in Mumbai. Brookfield is in the process of selling the remaining 50 per cent to its listed Reit (real estate investment trust). The deal is expected to happen at $1.8 billion, including GIC striking it at $500 million.

GIC is also in the process of buying into the assets of The Xander Group’s 2015 vintage fund. The assets are in Pune, Bengaluru, and the National Capital Region.

The Singaporean investor has emerged as the finalist to buy Waverock Property, of 2.4 million square feet, of Shapoorji Pallonji and Allianz in Hyderabad. GIC is said to have quoted around Rs 2,200 crore for this.

According to sources, GIC has the mandate to invest $1-2 billion in Indian real estate.

As of last year, it was the world’s sixth-largest sovereign wealth fund with $440 billion in assets under management.

An email sent to GIC did not elicit any response.

GIC’s move to buy assets has come when most North American investors, including Blackstone and Brookfield, are on a slow burn as regards investment in office properties.

Blackstone, the biggest owner of office properties in the country, is selling stakes in its listed Reits. Market watchers say after it bought the commercial portfolio of Prestige group at Rs 9,160 crore in 2021, it has not made any major deals.

However, Blackstone is investing in its logistics platform Horizon Industrial Parks and Nexus Malls, they said.

In the pipeline

• GIC is in the final leg of three real-estate deals in the country
• In talks to buy 50% of Brookfield’s assets in Mumbai
• In the process of buying into the assets of The Xander Group’s 2015 vintage fund
• Emerged as the finalist to buy 2.4 million square feet property of Shapoorji Pallonji and Allianz in Hyderabad

Brookfield, after buying the portfolio of assets from RMZ at Rs 14,000 crore in 2020, has not made major investment in office properties in the country, according to them.

“GIC is a sovereign fund and there is no dearth of capital for it,” said an executive of a Singapore-based investment firm.

Shobhit Agarwal, managing director of Anarock Capital, said: “GIC is getting good deals because there are not many buyers in the market.” Since it is an Asian investor, it is well placed to invest now compared to its American counterparts.

He said GIC was investing also in Australia and Japan.

In November last year, GIC floated a $600-million joint venture with Asia-Pacific-focused real estate services and investment company ESR Group to acquire income-producing core industrial and logistics assets in the country.

In June 2021, it partnered mall developer Phoenix Mills to establish a $733-million (about Rs 5,362 crore) investment platform for retail-led mixed-use assets.

It also has joint ventures with DLF for residential and office developments.

Last year, it, along with partner Ashwin Seth Group, sold Viviana Mall to Abu Dhabi Investment Authority-backed Lake Shore India Advisory for over Rs 1,900 crore.