Home News Blackstone in talks with Bain to sell $480 million stake in top Indian REIT

Blackstone in talks with Bain to sell $480 million stake in top Indian REIT

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Blackstone is in talks to sell about half its stake in Embassy Office Parks, India’s largest real estate investment trust, to private equity firm Bain Capital in a deal worth up to $480 million at current prices. two sources said.

The transaction marks US-based Bain’s first REIT investment in India. COVID-19 Pandemic. For Blackstone, that means selling more Embassy stake to adjust its portfolio.

Negotiations are still in the preliminary stages, sources told Reuters. The plan is to execute trading via block trading on the Indian stock exchange in the coming weeks, but no timeline or price has been finalized, according to first sources with direct knowledge of the matter. said.

General view of Central Financial District in Mumbai, India on June 13, 2017. REUTERS/Danish Siddiqui (Reuters photo)

A spokeswoman for Blackstone declined to comment, but Bain Capital and Embassy did not respond to requests for comment. The source was not named because the discussion was private.

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Embassy Office Parks is India’s first REIT to go public in 2019. In cities such as Bengaluru and Mumbai, he owns and operates over 43.2 million square feet of office parks and office buildings, making him the largest office REIT in Asia.

REIT owns and operates real estate An asset similar to a mutual fund holding shares. They receive rent from the properties they manage and use it to distribute dividends to investors.

Air India aircraft

An Air India aircraft landing at Chhatrapati Shivaji Maharaj International Airport in Mumbai on January 27, 2022. ((Photo by INDRANIL MUKHERJEE/AFP via Getty Images)/Getty Images)

Blackstone currently owns 24% of Embassy REIT, with a market capitalization of approximately $4 billion. The private equity group plans to sell about 10% of which he plans to sell 12%, the sources said. From $400 million he is worth $480 million, based on Monday’s closing price of the Embassy REIT on the Mumbai stock exchange.

The Block transaction marks Blackstone’s fourth Embassy stake sale, following sales in 2020, 2021 and 2022. In September, Blackstone sold $400 million in his REIT to investors, including the Abu Dhabi Investment Authority.

India’s economy has rebounded since the COVID pandemic to become one of the fastest growing major economies in the world amid inflation concerns weighing heavily.

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Knight Frank said earlier this month that Bengaluru and Mumbai recorded the highest office rental growth in the Asia-Pacific market from October to December, and that office rental prices in Indian cities are expected to rise over the next year. added.

With over $160 billion in assets under management worldwide, Bain Capital has already invested over $3 billion in India over the past decade.

For Blackstone, it’s about cashing.

If the deal with Bain goes through, Blackstone would have sold $1.4 billion worth of units in the Embassy REIT over the past three years, the first source said.

“Blackstone’s strategy to reduce its stake in Embassy is to diversify its capital. India’s office assets are mature and Blackstone is looking to invest in emerging asset classes such as retail and retail outlets. increase. Return destination data center It could be higher,” said Shobhit Agarwal, CEO of Anarock Capital.

Blackstone is cashing out to invest in data centers and retail. Network cabinet with server racks in data center with matrix. Photo credit: Klaus Ohlenschläger/picture-alliance/dpa/AP Images

“I’m betting on domestic consumption.”

Blackstone has sold stakes in some REITs, but is also investing in new assets, indicating its continued bullishness on the Indian real estate landscape, Agarwal added.

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US groups have invested over $11 billion in Indian companies and assets over the years.

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