Mumbai: Blackstone Group LP is in talks to acquire Adani Realty’s commercial office project at Mumbai’s Bandra Kurla Complex (BKC) for around ₹ 1,900 crore, said two people aware of the matter. The private equity firm stepped in after Shapoorji Pallonji Investment Advisors Pvt. Ltd backed out from buying the 10-storey building in Mumbai’s latest financial district, said the two people cited above. The investment arm of the Shapoorji Pallonji Group was the frontrunner for the deal and even completed a due diligence of the property, they said.
“Discussions with Blackstone are underway. Terms and conditions of the deal are being negotiated," said the first person mentioned above, adding that the deal is likely to be closed before the end of this fiscal year.
Spokespersons at Blackstone and Adani Realty declined to comment. A spokesperson of Shapoorji Pallonji Investment Advisors did not respond to an email until press time.
The 800,000 sq. ft project called ‘Inspire’ was developed by Adani Group’s real estate company. Swiss pharmaceuticals firm Novartis is one of the building’s biggest tenants, having picked up around 100,000 sq. ft last year.
The last couple of years have seen Blackstone lap up some of the marque commercial properties in India. This year, it has signed a slew of deals with Indiabulls Real Estate Ltd. In March, Blackstone bought a 50% stake in Indiabulls’ flagship office properties in central Mumbai—One Indiabulls Centre and Indiabulls Finance Centre—for $730 million. It also bought out Mumbai-based firm’s Chennai commercial asset for ₹ 900 crore.
In BKC, Blackstone is close to buying One BKC, a 1.5 million sq. ft commercial office complex owned by Mumbai-based Radius Developers for over ₹ 2,300 crore. The property is considered one of the marque projects, housing large multinational firms like Facebook Inc., Amazon.com Inc. and Bank of America Merrill Lynch, among others.
So far, Blackstone Real Estate has committed more than $5.3 billion across 31 investments in India. It comprises $3.9 billion in office assets covering 100 million square feet.
Grade A office properties in BKC have gained interest from several investors and financial institutional firms. With monthly rentals of around ₹ 220-350 per sq. ft and growing at an annual rate of 2.7%, BKC is one of the most expensive commercial locations in Mumbai, according to Colliers International, a property advisory firm.
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Meanwhile, despite the slowdown in the residential segment, demand for commercial office space continues to grow.
Some large commercial office deals have been signed in the past year. Singapore-based real estate asset manager Mapletree Investment Pte. Ltd signed one of the largest deals this year by acquiring Chennai’s information technology park SP Infocity for ₹ 2,400 crore. The park is jointly owned by Canada Pension Plan Investment Board (CPPIB) and Shapoorji Pallonji Investment Advisors.
Other big ticket size deals include Canada’s Brookfield Asset Management Inc. buying Essar Group’s Equinox Business park for ₹ 2,400 crore and Ascendas-Singbridge Group buying two upcoming office buildings in Navi Mumbai’s Aurum Platz IT Park for ₹ 930 crore.