Bengaluru: Real estate developer Prestige Estates Projects Ltd has abandoned a plan to sell a stake in its office portfolio to Singapore’s sovereign wealth fund GIC Pte Ltd. The Bengaluru-based company signed a term sheet with GIC in February to sell a 40% stake in a clutch of office projects for about ₹ 2,000 crore. The transaction was expected to close within 60-90 days, Prestige said at the time.
“Unfortunately, we couldn’t proceed with the transaction due to certain important aspects and the deal has been shelved," Venkat K. Narayana, chief executive of Prestige Estate Projects, said in a call with analysts on Wednesday to discuss quarterly earnings. He said the company is not actively in talks with other investors to raise capital, after failing to reach a deal with GIC.
The real estate firm has nine office projects under construction totalling 6.86 million sq.ft, and 16 upcoming office projects. Its residential portfolio is larger, with 37 projects underway across 41 million sq.ft It has a land bank of about 42 million sq.ft of developable area.
In another deal, GIC, which bid along with Mumbai’s K. Raheja Corp for Chennai-based information technology park SP Infocity that is jointly owned by Canada Pension Plan Investment Board (CPPIB) and Shapoorji Pallonji Investment Advisors, recently lost out to Singapore-based real estate asset manager Mapletree Investment Pte Ltd, with the latter emerging as the highest bidder.
GIC and Mapletree were the final contenders for the transaction.
In the last few years, GIC has emerged as one of the most active real estate investors in India across residential, commercial office, hospitality and retail sectors. Last year, promoters of real estate developer DLF Ltd sold a stake in the rental arm for ₹ 8,900 crore to GIC.
South India-focused Prestige Group is also making an entry into the national capital region centred on Delhi with a residential project in Noida and a commercial office project in Gurguram, said Narayana. Both transactions are being finalized and are in advanced stages, he added.
Earlier this year, Prestige also announced a ₹ 2,500 crore residential joint venture agreement with HDFC Capital Advisors Ltd to build a mid-income housing portfolio. That partnership, however, is on track. The first project under the alliance will comprise 185 acres at Sarjapur Road, Bengaluru, for which about ₹ 256 crore will be drawn from HDFC.
Narayana said two more projects are also in discussion under the joint venture.
In the September quarter, Prestige clocked new sales of more than ₹ 1,000 crore, up 28% from a year earlier. Its rental income in the second quarter increased 21% to ₹ 181 crore.