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GIC, Singapore’s sovereign wealth fund, will acquire a significant minority stake in a $733-million joint venture investment platform being set up with Phoenix Mills Limited (PML’s) to develop retail-led mixed use assets in India, the two companies announced on Wednesday.
These assets, in Mumbai and Pune, totalling about 3.4 million sq ft of leasable retail and office space, are amongst PML’s well-performing operational properties, they said.
“The strategic partnership with GIC has taken shape at an opportune time, revalidating the long-term attractiveness of India’s resilient consumption story. It also underscores the fact that the current impact on pre-eminent brick and mortar retail is only transient,” said Shishir Shrivastava, Managing Director, Phoenix Mills.
“We believe that the joint venture will generate resilient long-term returns. GIC has been investing in India for more than a decade and our long-term confidence in the Indian real estate market remains strong,” said Lee Kok Sun, Chief Investment Officer of Real Estate, GIC.
Eyes acquisitions
Through this platform with GIC, “we intend to jointly explore value-accretive acquisition opportunities,” said Atul Ruia, Chairman, Phoenix Mills. “Proceeds will act as growth capital to both PML and its subsidiaries to explore and further enhance our portfolio of annuity income assets,” Ruia added.
“We recognise that the unprecedented global crisis is impacting consumer sentiments and the necessary lockdown have made it challenging for all businesses, especially those in the retail sector,” said Kishore Gotety, Co Head (Asia ex-China) of Real Estate at GIC.
However, the long-term structural growth that the Indian retail industry continues to offer due to favourable demographics, urbanisation, growing middle class, and increasing consumerism trends will still benefit the joint venture. “We expect continued strong performance in the Indian retail sector as organised retail penetration increases and population density remains high,” Gotety said.
The transaction is subject to relevant regulatory approvals.
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