GIC signs $247m JV with Brigade Group(2)

GIC Private Limited, 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 Singapore’s sovereign wealth fund, through an affiliate, will create an investment platform to acquire and invest in residential and mixed-use developments in the southern parts of the country.

“As a long-term value investor, GIC is a believer in India's growth potential,” said Lee Kok Sun, managing director and co-head of Asia at GIC Real Estate, 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.”

The venture's first joint project, Brigade Cosmopolis, is a residential community currently under construction in Bangalore. Spread over 1.6 million square feet, the complex will house more than 800 families. 

Suresh Kris, chief financial officer at Brigade, told PERE that 1.7 billion rupees have been invested so far in this project, which is expected to be completed in two to three 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 plans have entered into deals with individual developers to invest in real estate: the Canada Pension Plan Investment Board (CPPIB) and Dutch pension administrator APG Asset Management being the most recent entrants. 

In February, CPPIB 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.