GIC pips Brookfield to buy stake in Provenance Land
SingaporeansovereignfundGICpipped CanadianinvestorBrookfieldtoemergeas thefront-runnertobuyasignificantstakein ProvenanceLand. Thedealsizeisexpected tobearound~1,000crore. RAGHAVENDRA
KAMATH & RANJU SARKAR write
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 ~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 ~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 highend 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.