Singapore wealth fund GIC to invest $300 mn in DLF projects.

DLF, India's largest real estate company, has formed a 50-50 joint venture with GIC, Singapore’s sovereign wealth fund, to develop two residential projects in New Delhi. While GIC will invest $300 million (around Rs. 1,990 crore), DLF will develop the projects. The investment, which needs to be approved by the Competition Commission of India (CCI), has come at a time when the Indian real estate sector continues to be sluggish.

Located along Shivaji Marg in New Delhi’s Moti Nagar area, the projects would come up over five million sq ft, sources said. The launch is expected within a year, while construction could take up to five years. Though a decision on this is yet to be taken, the construction work could be outsourced to another company, it is learnt.

DLF is likely to use the money raised from GIC to part-service its debt, pegged at Rs. 21,600 crore as of the end of June this year.Recently, the company’s stock rose 3.4 per cent over its previous close on BSE to end at Rs. 109.60 a share.

GIC has invested in India’s real estate projects earlier as well. For instance, it had last year entered into a Rs. 1,500-crore JV with Brigade Enterprises to develop properties in southern parts of the country.

In recent past, other pension and sovereign funds have also been keen on Indian real estate. Among those, CPPIB Credit Investments, a subsidiary of Canada Pension Plan Investment Board, entered into a pact with Piramal Enterprises for a $500-million realty debt fund.

Also, Xander Group and a consortium led by Dutch pension fund APG Asset Management were in a $300-million venture for an office realty project.


BS