Bangalore: The Blackstone Group Lp, Embassy Property Developments Pvt. Ltd and HDFC Property Fund are set to buy out Vrindavan Tech Village, a special economic zone in Bangalore, for Rs.1,951 crore, according to three people familiar with the development.
Blackstone and Embassy together will invest about two-thirds of this sum, and HDFC Property Fund the balance one-third, they said. The deal is still underway and will take a few months to close.
A deal this size comes at a time when private equity funds are eyeing more but smaller real estate deals in India than before to hedge against potential risks in a market promising high returns.
Reuters first reported the development on Thursday.
Blackstone and Embassy last year formed a special purpose vehicle, Pune Dynasty Projects Pvt. Ltd, to jointly buy lease rental generating assets. Pune Dynasty has since invested in three projects being developed by Embassy.
The 106-acre SEZ already has around two million sq.ft. of space built for information technology companies on 22 acres. Embassy Property will build space for IT firms on another 54 acres and homes on the remaining 30 acres, a company executive said, declining to be identified.
Vrindavan Tech Village is located in Bangalore’s outer ring road and is promoted by Mithilesh Kumar Tripathi, chairman of Vikas Telecom Ltd. The SEZ is developed by Assetz Homes. The firms didn’t respond to requests for comment.
An HDFC Property Fund executive, who also didn’t want to be named, said his firm has committed to invest in the tech SEZ project but this will depend on the $500 million of capital it is currently raising from overseas investors. About $300 million of this is expected to come in by April.
Blackstone didn’t respond immediately to an email sent on Thursday afternoon.