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Sovereign wealth fund GIC has entered into a strategic partnership with India’s DLF Ltd to develop the rental assets portfolio under the consolidated portfolio of the latter’s unit, DLF Cyber City Developers Ltd. (DCCDL).
One of the biggest private equity transactions in India, the transaction will create one of the leading platforms for rental properties in the country, with rent yielding assets at 26.9 million sq ft.
Currently, the portfolio has 2.5 million sq ft under development, with further development potential of around 19 million sq ft.
In a release, GIC noted that the partnership enables “sustainable, long-term growth of DCCDL’s rental business and creates an optimum structure for its rental business to improve efficiency, with long-term capital for growth of the portfolio”.
“This portfolio comprises high-quality, income-generating assets which are located across India’s top-tier cities,” said GIC Real Estate chief investment officer Lee Kok Sun.
“In addition, there is significant development potential within the portfolio. As a long-term investor, we believe in the growth potential of India and in strengthening relationships with like-minded partners.”
For DCCDL, the transaction implies an enterprise value of around US$5.6 billion (S$7.6 billion). Upon completion of a series of steps provided under the transaction, DLF will hold 66.66 percent equity shares, while GIC’s affiliate will own 33.34 percent equity shares in DCCDL.
The gross proceeds to the sellers would be US$1.9 billion (S$2.6 billion), which comprises secondary sale of equity shares (post-conversion of Compulsory Convertible Preference Shares – CCPS) to GIC for around US$1.4 billion (S$1.9 billion), as well as two buybacks by DCCDL of CCPS for around US$0.5 billion (S$0.678 billion).
This article was edited by Denise Djong.
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