Singapore’s sovereign wealth fund GIC and Temasek-owned real estate asset manager Mapletree Investment have emerged as the front runners in the race to acquire Chennai’s information technology park SP Infocity that is currently jointly owned by Canada Pension Plan Investment Board (CPPIB) and Shapoorji Pallonji Investment Advisors.
GIC has bid for the property along with realty developer K Raheja Corp, while Mapletree Investment is bidding on its own. The transaction for the commercial property, located in Chennai’s Old Mahabalipuram Road, is expected to be worth anything between Rs 2,200 cr and Rs 2,400 cr. The property has total 2.7 mln sqft of leasable space and is 99.4% occupied with key tenants, including Amazon India, World Bank, HSBC and BNP Paribas.
The deal has entered the final lap and is likely to be concluded over the next few weeks. Both entities — GIC and Mapletree — have been shortlisted based on their initial financial bids and other terms offered by them. Global private equity players Blackstone Group, Brookfield Asset Management, Xander Group and Ascendas-Singbridge Group had also shown interest in acquiring this asset.
The joint venture was formed in 2013 to invest in foreign direct investment compliant, stabilised office buildings in major metro cities in India. CPPIB owns 80% with an initial equity commitment of $200 million. It will be advised locally by Shapoorji Pallonji Investment Advisors, CPPIB had said in 2015 while announcing the deal.
The Shapoorji Pallonji-CPPIB joint venture model is to own, operates and then sell income-producing office properties. Apart from CPPIB, Shapoorji has also formed a similar partnership with global pension major Allianz Group. Interestingly, the Shapoorji Pallonji-Allianz joint entity is set to acquire 2.5 mln sqft office asset WaveRock in Hyderabad for around Rs 2,000 cr after edging out other bidders, including InterGlobe Enterprises and CPPIB.
GIC entered the Indian real estate market over a decade ago, but has turned aggressive only recently and has been actively picking up stakes in properties and forming alliances with Indian developers for future developments. Apart from stake in DLF’s rental arm, GIC’s India real estate investment portfolio includes alliances with Godrej Properties, Bengaluru-based Pestige Estates and Brigade Enterprises. It also owns majority stake in 2.2 mln sqft commercial complex Nirlon in Mumbai’s Goregaon suburb.