Blackstone to buy office space in BKC for Rs 2,500 crore
The space forms part of the high-profile One BKC project in Mumbai’s financial district.
“As per the terms of the deal, the developer (Radius) will also hold an option to buy back 40% of the area being sold now. The call option for this 40% area can be exercised anytime over the next two years,” said one of the persons cited above. “The buyback will be concluded at prevailing market rates at that point of time.”
Radius will use the money to repay Rs 1,650 crore it owes Indiabulls Housing Finance, which will not have any debt exposure to the project following this. Radius will pay Rs 550 crore to the Mumbai Metropolitan Region Development Authority (MMRDA), the special planning authority for BKC, as the remaining premium for development rights to the plot.
Blackstone and Indiabulls Housing Finance declined to comment. A Radius spokesperson confirmed that a deal was in place without giving any further details.
Terms have been finalised and the transaction is expected to be concluded by the end of this month, with the buyer having paid an advance, said the people cited above. Blackstone has bought the project’s A wing, which has been fully leased to tenants such as Facebook, Bank of America, Trafigura Group, Brookfield and Amazon.
In addition to A wing’s 650,000 sq ft of office space, Blackstone is also acquiring 50,000 sq ft in the B wing. The B and C wings were previously strata-sold to various entities. The total project has 1.5 million sq ft of office space.
The deal trumps a 2015 sale of 435,000 sq ft office space to pharmaceutical company Abbott India by Godrej Properties in Godrej BKC for Rs 1,479 crore. Mapletree Investment, a Temasek-owned real estate asset manager, acquired information technology park SP Infocity in Chennai for Rs 2,350 crore in November.
Large real estate transactions concluded so far in India such as the DLF-GIC deal worth $1.9 billion and the $1 billion Hiranandani-Brookfield deal involved a portfolio of assets, while this transaction would be for a single asset.
Blackstone has emerged as an aggressive institutional investor in India’s real estate sector. It owns India’s biggest portfolio of income-producing office assets and has committed $5.3 billion across the key property markets of Mumbai, Noida, Pune, Bengaluru, Chennai and Hyderabad. Earlier this month, Blackstone and India partner Embassy Group entered into an agreement to buy out Indiabulls Real Estate founder and chairman Sameer Gehlaut’s 39.5% stake in the company for Rs 2,700 crore.
In April, Blackstone and Embassy joint venture Embassy Office Parks listed India’s maiden Real Estate Investment Trust (REIT). Embassy Office Parks put 33 million sq ft of office and hospitality assets under the REIT, comprising seven business parks and four city-centric buildings spread across Mumbai, Bengaluru, Pune and Noida. The REIT raised Rs 4,750 crore through the issue that was subscribed 2.58 times.
The US-based multinational private equity, alternative asset management and financial services firm has invested across more than 50 companies in India. It has deployed more capital in India than any other emerging market, with nearly $10.6 billion invested in private equity and real estate. Ends