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MUMBAI: Blackstone Group
has signed a term sheet to acquire the remaining 50% stake in Indiabulls Real
Estate’s commercial properties for
over Rs 4,420 crores, said persons with direct knowledge of the development.
Blackstone had concluded a similar deal for 50% of the portfolio for nearly Rs
4,750 crores in March 2018, marking one of the country’s largest such
transactions in real estate.
Indiabulls confirmed signing the term sheet with
Blackstone for the commercial portfolio, without ascribing a value to the deal.
It includes rights to assets at BLU in Mumbai’s Worli area and Sectors 104
and 106 in Gurgaon, Indiabulls said.
The deal is part of the Indiabulls Group’s plan
to exit real estate and focus on financial services, as part of which it’s
seeking to merge with Lakshmi Vilas Bank. Indiabulls Real Estate also wants to
repay all its debt from the proceeds. At the end of FY19, Indiabulls Real
Estate’s total net debt stood at Rs 4,590 crores.
ET was the first to report, on August 5, that
Blackstone Group was close to signing a deal to buy the remaining 50% stake. The
move will give Blackstone control of a 5-million-sq-ft portfolio, while
strengthening its position as the country’s largest commercial property owner.
The portfolio includes two marquee properties — One Indiabulls and Indiabulls
Finance Centre in Mumbai’s Lower Parel and Prabhadevi areas — and one in
Gurgaon.
One of the persons said that apart from these
assets, Blackstone and Indiabulls are in advanced talks for one more asset in
the National Capital Region and this deal is also expected to be concluded over
the next few weeks. This transaction is estimated to be valued at around Rs 700
crores.
It may be recalled that Blackstone had fully
acquired the developer’s Chennai commercial property separately for around Rs
850 crores last year. Blackstone declined to comment.
Blackstone is expected to add the assets acquired from Indiabulls Real Estate to the portfolio of Embassy Office Parks Real Estate Investment Trust, its joint venture with Bengaluru-based realty developer Embassy Group.
In April, Embassy Office Parks raised Rs 4,750 crores by listing India’s maiden real estate investment trust with a 33 million sq ft commercial portfolio. This portfolio encompasses office and hospitality assets, including seven business parks and four city-centric buildings in Mumbai, Bengaluru, Pune and Noida. The Embassy Office Parks REIT is expected to hold the right of first refusal on Indiabulls Real Estate’s under-construction commercial portfolio, once ready and leased. However, the decision will be taken independently by its board, ET had reported earlier.
The US-based private equity, alternative asset management and financial services firm has emerged as the most aggressive institutional investor in India’s real estate sector. It owns the largest portfolio of income-producing office assets in the country. Blackstone has so far committed $5.3 billion to the property markets of Mumbai, Noida, Pune, Bengaluru, Chennai and Hyderabad.
Source: ET Realty
