Singapore’s sovereign wealth fund GIC on Wednesday (2 June) said it has formed a joint venture with an India-based retail mall developer Phoenix Mills Ltd, to establish an investment platform for retail-led mixed-use assets in India with an initial portfolio of US$733 million (S$970 million).
In a joint statement, GIC noted that it will acquire a significant minority stake in Phoenix Mills’ US$733 million portfolio of retail-led mixed-use developments, located in the prime consumption centres of Mumbai and Pune.
These assets in Mumbai and Pune, totalling about 3.4 million square feet of leasable retail and office space, are “amongst PML’s most prime and well-performing operational assets”, said the company.
“We are pleased to partner with PML in this Joint Venture to acquire a stake in these best-in-class retail assets in prime locations in India. With the management capabilities of a leading partner like PML, we believe that the Joint Venture will generate resilient long-term returns.
“GIC has been investing in India for more than a decade and our long-term confidence in the Indian real estate market remains strong,” said Lee Kok Sun, GIC’s chief investment officer of real estate.
GIC also stated that the transaction is subject to relevant regulatory approvals.
Chairman of Phoenix Mills, Atul Ruia, said in the statement that the company intends to “jointly explore value-accretive acquisition opportunities” through this platform with GIC.
“Proceeds from the transaction received by PML will act as growth capital to both PML and its subsidiaries to explore and further enhance our portfolio of annuity income assets,” he noted.
India-based news outlet Mint reported that Phoenix Mills had signed a term sheet with GIC last December to sell 26 per cent stake in select assets in Pune and Mumbai at an enterprise value of Rs5,600 crore.
Managing director of Phoenix Mills, Shishir Shrivastava, believes that the current disruption has tested the elasticity of the company’s business model and sharpened its capital budgeting.
“With multiple vaccines now feasible, we see a clear path towards turning the corner past the 2nd wave. As restrictions start relaxing, we are optimistic of a sharp re-bound in consumption, as we experienced post the first wave.
“Even through this trying period, our stated strategy for expanding our portfolio in market leading destinations is on track and on speed,” said Mr Shrivastava.
The company had also signed definitive documents with Canada Pension Plan Investment Board (CPP Investment) last week, for a new joint venture to develop a regional retail centre in Alipore, Kolkata.
CPP Investment will invest approximately ₹560 crore in the venture, Mindstone Mall Developers Private Ltd in tranches, for an ultimate equity stake of 49 per cent, as reported by Mint.