Bengaluru: Global private equity firm Blackstone Group Lp is set to buy a 50% stake in Indiabulls Real Estate Ltd’s prime office assets in central Mumbai for an enterprise valuation of around $1.3 billion, said two people directly aware of the transaction. The assets include Indiabulls Finance Centre and One Indiabulls Centre.
On Wednesday, Indiabulls Real Estate informed the BSE that negotiations and discussions with the third party investor/s for finalization of transaction are on and a meeting of the shareholders will be convened on 23 March regarding the proposed divestment.
Indiabulls is also in discussions to monetise or sell off its residential and commercial projects in Chennai.
The two Mumbai assets have around 3.3 million sq. ft of leasable area. Along with One Indiabulls Park in Chennai, these three completed assets are expected to generate annuity revenue of Rs813 crore by 2020-21, as per the company’s December quarter investor presentation.
If the Blackstone-Indiabulls deal goes through, it will be the first big real estate transaction of 2018. A Blackstone spokesperson declined to comment. Indiabulls didn’t respond to an email query.
The Mumbai-based developer has one residential township project—Indiabulls Greens—in Chennai. The project is being developed in three phases, of which the first phase has been delivered.
“Indiabulls is looking to sell off its residential project in Chennai for around Rs250-300 crore. Some buyers and investors have expressed interest. Chennai is a non-core property market and hence Indiabulls plans to exit," said one of the two people mentioned above, asking not to be named.
In another transaction, Indiabulls is also planning to monetise the One Indiabulls Park project in Chennai’s Ambattur area, which has 2 million sq. ft of leasable area.
“It is yet to be decided whether it will be completely sold or will only be a stake sale," said a second person, who spoke on condition of anonymity.
Unlike the residential sector that has witnessed a prolonged slowdown, the commercial real estate segment has attracted the interest of investors across the globe.
Blackstone’s real estate arm has committed around $4.1 billion across 27 investments in India, making it possibly the largest owner of commercial office assets in the country.
While office has been Blackstone’s core focus area here, it has also been steadily investing in shopping malls as well as hospitality projects.
Earlier this week, Mint reported that Blackstone is set to buy an 80% stake in Nitesh Hub, a shopping mall in Pune’s Koregaon Park from real estate firm Nitesh Estates Ltd for around Rs310 crore.
Blackstone and Singapore’s sovereign wealth fund GIC Pte Ltd have been aggressively investing in commercial real estate. In 2017, in one of the largest real estate deals in the country, GIC bought a stake in DLF Ltd’s rental arm for Rs8,900 crore