KOLKATA|MUMBAI: Singapore's sovereign wealth fund GIC is in talks with Gurgaon-based realty developer Vatika Group to form an exclusive alliance to invest in residential and commercial properties in north India. GIC is looking to infuse around $150 million in this platform in addition to its recent investments in two residential projects of Vatika Group in Gurgaon, said two persons familiar with the development.
In December, GIC had invested Rs 150 crore in a joint venture with Vatika Group to develop two projects with a development potential of over 2.3 million sq ft in Gurgaon. GIC is betting big on the Indian real estate market and has been actively scouting for assets. In December, the fund had signed an agreement to acquire a 39% stake in Nirlon that owns 3.3-million-sq-ft IT park in the Goregaon suburb of Mumbai.
The stake buy in Nirlon, and the subsequent open offer, will see GIC investing around Rs 1,200 crore. "The transactions announced in December for two Gurgaon residential projects have led to further investment potential. Through the partnership, Vatika Group as a local expert, will take care of execution and address projectspecific risks," said one of the persons mentioned above. According to him, GIC, in line with its investment focus, is keen on working with a local expert that can execute and address project-specific risks. Email queries sent to both GIC and Vatika Group remained unanswered till the time of going to press.
However, following GIC's Nirlon transaction, Singapore's sovereign fund had expressed its plans on long-term partnerships for their investments. "GIC is a long-term value investor. The investment teams work hard on our own, as well as with our partners, to find opportunities that give us exposure to attractive markets," GIC had responded to ET's earlier query on India focus, post the Nirlon transaction in December.
"Real estate investing is about establishing long-term partnerships with leading market players to source and add value to high quality assets." GIC is not an exception, but its strategy is in line with several pension and sovereign funds with big appetite for tying up with builders of repute to build a large Indian realty asset portfolio for stable returns and distribution of risks.
For instance, Blackstone has formed a special purpose vehicle with Embassy Property Developers, while Qatar Investment Authorities is backing RMZ to buy commercial assets. Some of the recent tie-ups to invest in the country's real estate space also include Mahindra Lifespace Developers that is being backed by Standard Chartered Bank.
Godrej Properties and a consortium led by Dutch pension service provider APG have also entered into an agreement for Rs 1,100 crore investment in residential projects across major cities in India.