Blackstone set to buy retail space from L&T Realty for Rs1,450 crore
Blackstone has in-principle agreed to buy the retail portion of Seawoods Grand Central in Navi Mumbai
Bengaluru: Blackstone Group Lp is set to buy a million sq.ft of retail space in L&T Realty Ltd’s Seawoods project in Navi Mumbai for Rs.1,450 crore, said two people familiar with the development.
Blackstone has in-principle agreed to buy the retail portion of Seawoods Grand Central, the people said, requesting anonymity.
The so-called transit-oriented development project is built around the railway station of Seawoods-Darave. L&T Realty also has 4 million sq.ft of office space coming up as part of a 40-acre project.
Blackstone, which has already invested $6 billion across sectors in India, is increasing its bets on real estate assets in the country.
“There is clearly a return of interest by investors to buy retail assets, particularly with relaxation in FDI (foreign direct investment) norms,” Shashank Jain, partner (transaction services) at consultancy PricewaterhouseCoopers India. “Global funds will selectively pick up well-positioned malls that promise a steady stream of revenue.”
Blackstone is currently conducting due diligence of the Seawoods project, said one of the two people cited above. “It will take a while for the transaction to be concluded. The million sq.ft is almost fully leased out,” this person said.
Blackstone and L&T Realty declined to comment.
If completed, the transaction would be Blackstone’s second real estate investment this year. It invested Rs.470 crore in Salarpuria Sattva Goup’s ongoing office park project in Hyderabad’s Knowledge City earlier this year.
Blackstone, which has primarily invested in buying out office projects in India, is now also looking at retail shopping assets and hotel projects, said the second person cited above, who also didn’t wish to be named.
Mumbai-based L&T Realty, which has a portfolio of nearly 50 million sq.ft. of ongoing and upcoming projects, exited its real estate business in north India when it sold its commercial real estate project in Chandigarh to Carnival Group for Rs.1,785 crore last year. The project included Elante mall, a Hyatt hotel and office premises with a central courtyard. It now plans to focus on projects in Bengaluru, Mumbai, Navi Mumbai, Chennai and Hyderabad.
In an interview in December, L&T Realty CEO Shrikant Joshi said that as a policy, the firm doesn’t plan to run malls and wants to sell them although it will continue to build them in its projects.
“In Seawoods, we are talking to investor partners, but we want someone who will be a worthy successor,” he had said.
Realty funds invested about $410 million in residential, office and retail projects in the three months ended March, according to VCCEdge, which tracks investments, and Mint research. The data is based on deals that were announced during this period.
Sovereign wealth fund GIC Pte Ltd bought a 49% stake in Viviana mall in suburban Mumbai’s Thane at an enterprise value of about Rs.1,300 crore in the largest retail space deal in the period.
The actual investment by GIC couldn’t be ascertained.
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