GIC pips Brookfield to buy stake in Provenance Land

Singaporean sovereign fund GIC pipped Canadian investor Brookfield to emerge as the front-runner to buy a significant stake in Adarsh Jatia-owned Provenance Land, which owns Four Seasons Hotel & Residences in Worli area of Mumbai. The deal size is expected to be around Rs 1,000 crore — the biggest transaction in the hospitality sector this year.

For GIC, this is the second-biggest deal in real estate this year after it entered into an agreement with DLF to buy a 40 per cent stake of promoters in rental arm DLF Cybercity Developers (DCCL). Though the company is yet to announce the deal value, sources said it would be around Rs 12,000 crore.

While a mail sent to GIC did not elicit a response, Jatia declined to comment on the matter.

The 200-key hotel is on a 4.5-acre land near Worli Naka in Mumbai, and branded residences are under construction.

“It is a good property, and a high-end residential property is also coming up. Both factors must have attracted GIC,” said an investment banker, who did not want to be quoted.

GIC also has a stake in a joint venture between Accor Hotels and InterGlobe. French chain Accor owns the Ibis and Novotel brands. Unlike others, GIC stays invested for a longer time as it has perpetual sovereign money, said the banker quoted earlier. “But they believe in treading cautiously and buy into only quality assets,” the banker said.

GIC has a fairly large portfolio in real estate in the country.

Besides stakes in companies such as DLF and Prestige, it has a portfolio of seven million sq ft of offices. With the DLF deal, it will go up to 34 million sq ft. It also has stakes in two malls in Mumbai — Viviana and R City.

Two years ago, it bought listed company Nirlon, which had Nirlon IT Park in Mumbai with an area of 5 million sq ft. GIC has a joint venture with US-based Tishman Speyer, which has properties measuring about 2 million sq ft.

GIC has also formed a non-banking finance company with US investor KKR to provide debt to real estate developers. GIC has $100 billion in assets under management globally, of which seven per cent is in real estate.

MAJOR INVESTMENTS
 
·         The deal size is expected to be around Rs 1,000 crore
·         If the deal takes place, it will be the biggest deal in the hospitality sector this year
·         GIC also has stake in an Indian joint venture between Accor Hotels and InterGlobe
·         It entered into an agreement with DLF to buy 40 % stake of promoters in the latter’s rental arm this                 year
·         Though the company is yet to announce the deal value, souces said it would be around                                   Rs 12,000 crore
·         It has a joint venture with US-based Tishman Speyer
·         2 years ago, it had bought Nirlon which has Nirlon IT Park in Mumbai
·         It has a joint venture with US based Tishman Speyer