Tata Group-controlled Indian Hotels Co. Ltd has joined hands with Singapore’s wealth fund, GIC Pte., to invest as much as $600 million over three years in buying hotels in India.

The partners will acquire fully-operational hotels mainly in the luxury, upper scale and upscale segments and house these in a separate special purpose vehicle with its own funding, according to an exchange filing by the Indian partner in Mumbai. The equity contribution of Indian Hotels Co. in the acquisitions will be 30 percent and GIC’s will be 70 percent, the filing said.

The strategic partnership will extend the Indian company’s presence at the top-end of the market, where it already runs a chain of properties under the Taj Hotels brand. Chief Executive Officer Puneet Chhatwal in February outlined plans to open a hotel a month this financial year, build partnerships and increase margins. GIC has already invested in the South Asian nation’s real estate space, including a $1.4 billion commercial property deal in 2017.

“GIC offers very long-term capital and hospitality requires someone like that rather than a private equity investor,” said Anuj Puri, chairman at Anarock Property Consultancy Pvt Ltd. in Mumbai. “Indian Hotels has the ability to deliver, manage and maintain, so it’s a great partnership.”

The deal will allow Indian Hotels Co. to pursue acquisitions in an asset-light format, with the Indian partner managing the properties, according to the company statement.

Indian Hotels Co. will add 1,900 rooms to its capacity this financial year after signing contracts to manage 22 new properties last year, BloombergQuint reported earlier this month. The share of management contract rooms in the company’s portfolio increased to 40% from 32% last fiscal, according to the report.

Government of Singapore Investment Corp. or GIC was established by the Singapore government to manage foreign reserves and has more than $100 billion in assets.

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Photo Credit: The strategic partnership will expand the Indian company’s presence in its home country, where it already operates Taj Hotels. Bloomberg