GIC Buys Stake in Mumbai Four Seasons Developer for Reported $143M

GIC is acquiring a minority stake in Provenance Land, the developer of India’s first Four Seasons hotel, according to a statement on August 22nd by the Singaporean sovereign wealth fund.

Sources familiar with the deal, as cited in India’s Economic Times, indicated that GIC is acquiring 49 percent in the Mumbai developer for 10 billion rupees ($143 million), in the latest in a series of investments by the $100 billion fund into Indian real estate ventures.

The deal gives GIC a slice of Provenance Land, which owns the 202-room Four Seasons Hotel Mumbai and sites for residential and commercial projects adjacent to the Mumbai landmark.

Prime Land, Three Developments

“This investment is a unique opportunity to acquire a stake in a high-end mixed-use development situated in a prime location in Mumbai. In addition to the exclusive Four Seasons properties, the proposed office development is an attractive proposition, given continued demand for quality office space and expected long-term rental growth in Mumbai,” said Lee Kok Sun, Chief Investment Officer of GIC Real Estate.

In GIC’s announcement, neither the price nor size of the equity stake were disclosed, with the sovereign wealth fund saying only that it was taking a “significant minority stake”. The deal had earlier been reported in July, before being officially confirmed this week.

Mumbai-based Provenance Land Private, which was founded in 2001, owns four acres in Worli, Mumbai, a prime area that was once one of the Seven Islands of Bombay. The site is the location of the 34-storey, 202-room Four Seasons Hotel Mumbai, which opened its doors in 2008, and where the company is building the 64-story, 41-unit Four Seasons Private Residence and where it has plans to construct an office tower. Provenance Land is managing the development, according to the release from GIC.

The Times of India reports that the company launched the private residence project in 2015 with an investment of 6.5 billion rupees. The expected completion date is 2020, and as of the end of last year more than half of the units had been sold. Adarsh Jatia, managing director of Provenance, told the local press that the office project would involve an investment of $250 million and the development of 700,000-800,000 square metres of space.

The contest for the stake has been underway for more than a year. Brookfield Asset Management had been competing with GIC for the shareholding in 2017 and for a time was seen as the favourite. Blackstone, which is developing the Four Seasons Hotel Bengaluru at Embassy ONE with its partner Embassy Group, was also said to be interested in the Mumbai property, according to a report in the Economic Times.

GIC Busy in India

The Singapore fund has been an active investor in a diverse range of Indian properties. In 2014, GIC agreed to acquired 62.6 percent of Mumbai-listed Nirlon, owner of Nirlon Knowledge Park in Goregaon, Mumbai. In August last year, it purchased a third of DLF Cyber City Developers (DCCDL), the property rental subsidiary of Gurgaon-based builder DLF, for $1.4 billion. In September 2017, GIC formed a joint venture with K Raheja Corp Group to acquire a 3 acre site in Worli, and in June 2018 it bought a $150 million stake in Mumbai developer Godrej Properties.

A number of other deals are in the works. In February, the Business Standard reported that GIC had signed a term sheet with the Prestige Group to buy 40 percent stake in Exora Business Park for 26 billion rupees. Exora has five projects, one in Chennai and four in Bengaluru.

Last week, it was reported by the Press Trust of India that GIC would be coinvesting a total of 12.5 billion rupees in a National Capital Region housing project along with partner DFL. The site will be at Moti Nagar, Delhi, where DFL acquired a 38 acre site in 2007.

GIC is an active hotel investor globally. In March, together with a group of investors it purchased 55 percent of AccorInvest, the property arm of AccorHotels, for $7.1 billion.