India’s largest realty firm DLF today sold about 50 per cent stake each in two upcoming projects here to Singapore’s sovereign wealth fund GIC for Rs 1,990 crore.
To boost cash flow and reduce debt, the company’s arm DLF Home Developers Ltd (DHDL) and GIC have “entered into a joint venture to invest in two upcoming projects located in Central Delhi”.
DLF is raising private equity at project levels after a gap of 4-5 years.
“GIC will invest approximately Rs 1,990 crore. The JV is expected to benefit from GIC’s experience of investing in integrated developments across the globe,” DLF said in a statement.
It did not share the details of the joint venture, but sources said the realty major has sold around 50 per cent shareholdings in the two upcoming projects, adjacent to its existing project ‘Capital Green’ at Moti Nagar here.
The Rs 1,990 crore investment by GIC is consideration for around 50 per cent shareholding in each of these projects, spread over about 25 acres, they said.
The deal will be completed once all statutory requirements are met. DLF would utilise this fund to meet operational cost and reduce debt, which stood at Rs 21,598 crore as on June 30.
With sluggish property market in last 2-3 years, DLF had announced in February that it would raise over Rs 3,000 crore through divestment or joint ventures in certain projects to improve cash flow and reduce debt.
“We hope that this investment is a beginning of a new relationship with GIC at the project level. We look forward to working together with GIC in many projects, both residential and commercial,” DLF Senior Executive Director Finance Saurabh Chawla said.
“Going forward, such project level investments shall lead to unlocking of embedded value in many of DLF’s development projects,” he added.
DLF’s CEO Mohit Gujral said the joint venture with GIC will help the company to “potentially unleash many more signature developments and herald a new era of smart cities”.
Loh Wai Keong, Managing Director and Co-Head Asia, GIC Real Estate said: “GIC is confident in India’s long-term growth potential and we look forward to partnering DLF to tap into the attractive opportunities of India’s real estate.”
The company expects to collaborate with DLF on more projects in the future, he said.
GIC is a leading global investment firm with well over $100 billion in assets under management, while DLF is leading realty firm with a land bank of 300 million sq ft.