Singapore’s GIC buys 49% stake in Mumbai-based Provenance Land

Mumbai: Singapore’s sovereign fund GIC Pte. Ltd has acquired about a 49% stake in India’s Provenance Land Ltd, valuing the property developer at an enterprise value ₹ 1,300 crore, two people aware of the transaction said on condition of anonymity.

The transaction announced on Wednesday is the first investment by GIC into a mixed-use project in India. GIC and the Mumbai-based realty company announced the deal but didn’t disclose financial details. A spokesperson for GIC said the company “will not be commenting beyond the news release.”

Funds from the stake sale would be used to develop Provenance’s mixed-use project spread across 4.5 acres in Worli, Mumbai.

The project currently comprises a 202-room Four Seasons five-star luxury hotel, a 64-storey Four Seasons Private Residences which is under construction, and a proposed tower for offices, the companies said in a joint statement. A wholly owned company of Provenance Land will manage the project.

Adarsh Jatia, managing director of Provenance Land, said in an interview that the company plans to make fresh investments of around $250 million in the project that includes 700,000-800,000 sq. ft of office space.

“This investment marks a key milestone for Provenance Land, as it directly bears out the intent to expand quickly and strategically into new best-in-class developments and deliver on our vision...GIC’s investment brings us their international expertise in these asset classes,” said Jatia, according to the statement. This is the second deal for GIC in India after it bought 33.34% stake in DLF Ltd’s rental arm for nearly ₹ 9,000 crore last year.

GIC’s other major investments include investing about ₹ 2,000 crore for a 40% stake in a portfolio of office projects of Bengaluru-based Prestige Group.

“As a long-term global investor, we continue to have a positive outlook in India’s growth potential in the long run,” said Lee Kok Sun, chief investment officer, GIC Real Estate.

“This investment is a unique opportunity to acquire a stake in a high-end mixed-use development situated in a prime location in Mumbai.”

Sun said the proposed office development is an attractive proposition, given continued demand for quality office space and expected long-term rental growth in Mumbai.

Provenance Land, previously called Magus Estates and Hotels, has built five greenfield real estate projects in India including international hotel chain Hyatt Regency in Mumbai, Delhi and Kolkata.

In 2015, the company, in partnership with international hospitality chain Four Seasons Hotels and Resorts, launched Four Seasons Private Residences with an investment of ₹ 650 crore.

The project, which is expected to be completed by 2020, has a total revenue potential of about ₹ 1,500 crore, Jatia said, adding almost half of the total 35 units have been sold.