Singapore’s sovereign wealth fund, GIC has entered into a 15 billion rupees ($247.5 million; €188.5 million) joint venture agreement with Bangalore-based Brigade Group to invest in residential projects in India.
The property developer and GIC, through an affiliate, will create an investment platform to acquire and invest in residential and mixed-use developments in the southern parts of India.
“As a long-term value investor, GIC is a believer in India's growth potential,” Lee Kok Sun, managing director and co-head, Asia, GIC Real Estate said in a statement. “We seek partners who share our philosophy and values and have a reputable track record in the markets in which they operate.”
Their first joint venture project – Brigade Cosmopolis is a residential community currently under construction in Bangalore. Spread over 1.6 million square feet, the complex will house over 800 families. Suresh Kris, chief financial officer, Brigade Group told PERE that so far, 1.7 billion rupees have been invested in this project, which is to be completed in 2-3 years.
Other properties currently being considered for investment are in Bangalore, Chennai and Hyderabad.
The deal reflects yet another sign of how foreign institutional capital is once again finding its way back into the cash-strapped Indian real estate market.
In the past year, several sovereign wealth funds and pension funds have entered into deals with individual developers to invest in real estate: Canada Pension Plan Investment Board (CPPIB) and Dutch pension administrator, APG Asset Management being the most recent entrants. CPPIB, in February, tied up with Piramal Enterprises to provide debt financing to residential projects across major urban centers in the country. A few months later in May, APG and the Xander Group led an investor consortium to create a $300 million venture for investing in income-generating commercial office assets.