Home / Companies / News /  Blackstone invests Rs800 crore in 2 Hyderabad office projects

Bengaluru: Private equity firm Blackstone Group Lp has invested around Rs800 crore in two under-construction office projects in Hyderabad that are being developed by Salarpuria Sattva Group, according to two people familiar with the transaction.

The two projects—Knowledge Park and Knowledge Capital—have developable area of 6 million sq. ft and are located in the Gachibowli and Hitech City areas.

Blackstone had no investments in Hyderabad until early 2016, when it invested Rs470 crore in an office park project in Bengaluru-based Salarpuria Sattva’s Knowledge City office park, marking the global private equity fund’s first investment in the city.

It was also Blackstone’s first investment in a Salarpuria project.

“Salarpuria has emerged as a preferred developer partner for Blackstone in the Hyderabad property market," said one of the two people mentioned above, requesting anonymity.

In India, Blackstone’s developer partners are Embassy Group in Bengaluru, Panchshil Realty in Pune and K Raheja Corp. in Mumbai.

With its second investment in Salarpuria’s projects, the total developable area under this partnership has increased to 13 million sq. ft in Hyderabad. “The total investment across these three Salarpuria projects is around Rs5,000 crore, which includes the equity capital that Blackstone has invested along with project-level debt that will be raised," said the second person on condition of anonymity.

Hyderabad’s buoyant economy has propelled the city to become a leading realty hot spot in India, said Anshuman Magazine, chairman, India and South-East Asia, CBRE.

“There has been resurgent investment activity attracting funds from both domestic and multinational corporates putting the city well ahead of the curve among metros," said Magazine.

Bijay Agarwal, managing director of Salarpuria Sattva Group, declined to comment. A Blackstone spokesperson declined to comment.

In March, Blackstone bought a 50% stake in Indiabulls Real Estate Ltd’s prime office assets in Mumbai for around $730 million.

Blackstone is also set to buy an 80% stake in Nitesh Hub, a shopping mall in Koregaon Park, Pune from real estate firm Nitesh Estates Ltd for around Rs310 crore, Mint reported this year.

Blackstone has significantly strengthened its real estate investment portfolio in India, having committed $5.1 billion across 30 real estate investments across different asset classes including office, shopping malls and residential. Around $3.7 billion is in office space spanning 100 million sq. ft, consolidating its top position as the country’s largest office space investor.

India’s commercial real estate sector has been a saving grace with the residential sector witnessing a slowdown that has lasted for over four years now. Bengaluru and Hyderabad have led the office space leasing momentum.

In a 16 February report ‘The Comeback of Hyderabad—India’s Original IT Hub Rises Again’, property advisory CBRE said the a real estate market outlook for Hyderabad looks positive, backed by a stable political environment, growing occupier demand, improving infrastructure and the availability of a large skill pool.

“Over 6.8 million sq. ft of office space was leased in 2017 and the city commands the lowest rentals across top markets in south India," it said.

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