Blackstone Selling Embassy Office Parks REIT through Block Trade

Blackstone, is selling a large chunk of units of Embassy Office Parks REIT through a block trade and is looking to sell Embassy REIT units worth around $257 million. The trade is happening in a price band of Rs340-350 per unit, which is a discount of 3.5% to 6.7% to the closing price on Tuesday. The sale represents around 7% stake of the REIT. Currently, Blackstone holds 55% stake in the REIT. The sale of the REIT units comes after reports of IBM considering ending leases for nearly half of its office space in India amid increasing acceptance of flexible working options such as work from home. IBM described the speculation as incorrect. IBM is the single largest tenant for Embassy REIT, contributing nearly 12% to its rental revenue, as per the company’s filings with stock exchanges. The value of Embassy REIT's units has fallen almost 7%. “It is clear that a significant reduction in the densities of the workplace is coming, given increased priority to employee wellness, and this will drive demand. Some of this de-densification, but certainly not all, will be offset by more flexible workstyles including work from home," said Michael Holland, chief executive officer of Embassy Office Parks REIT. In the near term, the REIT has upcoming lease expiry and renewals of approximately 1.4 million square feet in its portfolio in the next 12 months, representing 5.5% of rental income. Of this, the REIT is in advanced discussions for 400,000 square feet.