MUMBAI: GIC Real Estate, a part of Singapore government's sovereign fund GIC, is investing over $100 million in a Godrej Properties office project in Mumbai's Bandra Kurla Complex.

The project is being developed on a 2.5-acre land, for which Godrej Properties had signed a joint development agreement with Jet Airways.

Godrej's move to sell stake in the special purpose vehicle set up for this project is aimed at easing its debt-equity ratio that currently stands around 2 times, said people familiar with the development. Apart from direct equity dilution in this SPV, both GIC and Godrej are also considering another option of forward sale of the entire commercial project.

Spokespersons of both Godrej Properties and GIC declined to comment.

In August 2011, Godrej Properties entered into an agreement with Jet Airways to develop the latter's 2.5-acre land parcel in BKC in Mumbai. Under this agreement, Godrej is expected to develop a commercial complex with around 1 million sq ft saleable area to be completed in three years, and share profits with Jet equally.

Apart from the 1 million sq ft of office space that can be sold to third parties, Godrej Properties has agreed to sell 161,460 sq ft of carpet area to Jet Airways at development cost to be used as the new headquarters of Jet Airways.

As part of this deal, Godrej agreed to pay Jet Airways 135 crore to compensate them for expenses that have already been incurred, and has acquired the Rs 360 crore debt obligation Jet Airways had on the property.

According to analysts, Godrej Properties' debt-equity ratio has moved out of its stated target range of 1-1.5 times owing to this additional debt obligation.

Recently, Godrej Properties' managing director and chief executive officer designate Pirojsha Godrej had admitted that the company's debt-equity ratio is on the higher side and said it was looking to reduce the debt by monetising commercial assets in Kolkata and Vikhroli.