India’s Third-Biggest Realty Deal Inches Closer

Private equity giant Blackstone has signed a binding term sheet with Bengaluru-based Prestige Project Estates to acquire a bunch of commercial, retail and hotel properties in India’s third-biggest real estate deal, the developer said in a statement. The proposed deal includes six completed office assets, nine malls, two hotels and four under-construction office projects. Investor is paying Rs 9,160 crore ($1.23 billion) for the assets, making it one of the biggest deals in India’s real estate market. In fact, the developer has been preparing for a deal for its rental assets for quite some time. In the last 2-3 years, it has streamlined a lot of its projects and bought out investors across special purpose vehicles (SPVs) in the run-up to this mega deal. In the residential segment, Prestige has so far completed 89 million square feet while its under-construction portfolio is roughly 32 million sq ft. In the commercial segment, it has delivered 36 million sq ft while the under-construction portfolio is 15 million sq ft. The developer has launched back-to-back projects in recent months in the residential segment. Over the last two months, it has launched Waterford in Whitefield, Bengaluru; Prestige Ocean Crest in Goa; and Prestige Primrose Hills in Bengaluru. Blackstone is one of the world’s leading investment firms. In April last year, Blackstone-sponsored REIT Embassy Office Parks made its debut on bourses, giving the country its first publicly listed REIT (real estate investment trust). The firm has a separate vertical for retail assets housed under Nexus Malls. Currently, there are nine malls under the Nexus Malls portfolio, spanning 5.5 million sq ft of Grade A retail space in India. Recently, it set up a platform with Hiranandani Group to develop and manage warehousing assets in the country. The Prestige-Blackstone deal marks a significant development in India’s real estate market at a time when the work-from-home trend is looming over rent-yielding office assets. The ecosystem will also soon see the completion of India’s biggest real estate deal with Canada’s Brookfield acquiring a bunch of office and co-working assets from Bengaluru developer RMZ.