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Blackstone, Panchshil Realty in talks to jointly buy ICICI Venture’s stake in Express Towers 

BY  Pooja Sarkar
The deal may give absolute returns of around 70 per cent to ICICI Venture in its five-year old investment.

Private equity firm Blackstone has joined hands with Pune-based realtor Panchshil Realty to initiate talks for buying 49 per cent stake in Express Towers, one of the iconic commercial properties in India’s financial capital Mumbai. The two have formed a special purpose vehicle to jointly acquire the stake held by ICICI Venture, two independent sources told VCCircle.

Blackstone, which has been one of the most active investors in the Indian real estate space striking big ticket deals in commercial realty, has been rumoured to be eyeing a stake the property for some time now. However, this time it is not going solo for the deal.

One source said, “They have formed a 51:49 per cent joint venture and looking to shell out Rs 850 crore for the asset and have already initiated talks.”

An email query sent to ICICI Venture chief did not elicit a response till the time of publishing this article. Blackstone spokesperson declined to comment. Sagar Chordia, director and co-promoter of Panchshil Realty, did not respond to text messages on the development.

Express Towers, located at Nariman Point in Mumbai, also happens to be the headquarters of a string of top private equity firms in the country, including Blackstone itself. While ICICI Venture holds 49 per cent, the remaining 51 per cent stake is held by the media firm Indian Express Newspapers (Mumbai) Ltd which publishes The Indian Express newspaper among other publications.

It had picked the stake in 2008 for close to Rs 500 crore and though Nariman Point, once the top commercial business district of Mumbai, has slowly seen corporates moving away to other locations such as Lower Parel and Bandra Kurla Complex, Express Towers remains a top attraction. The building was developed in 1974 and ICICI Venture had invested in the property from its India Advantage Fund Real Estate Series 1.

Last year ENAM Group leased 10,500 sq ft in the property; other lessees include GE, Warburg Pincus, Blackstone, Khazanah, General Atlantic, McKinsey, Bank of America Merrill Lynch, Lowe Lintas, HDFC Bank and Financial Technologies.

According to property consultancy Jones Lang LaSalle’s report ‘India Commercial Real Estate Market Update – 3 Q 2013, Across India’, the first half of 2013 saw office space absorption of 13 million square feet, against 12.8 million sq ft during the first half of 2012.

The first half of 2013 saw the completion of 19.3 million sq ft of office real estate, against 10.7 million sq ft in the first half of 2012. Among all markets, Mumbai witnessed the highest absorption of office space in the first half of 2013, with 3.8 million sq ft.

For Blackstone, this is one among a few other large deals in the real estate space in the works. Just last month Blackstone bid close to Rs 2700 crore to buy out Unitech Corporate Park's Gurgaon based special economic zone (SEZ). Others in the race include Maple Tree.

This year Blackstone acquired Pune-based Eon Free Zone for $82.76 million and Vrindavan Tech Village Pvt Ltd with Embassy Property Developments Ltd., HDFC Property Fund, GIC Special Investments Pte Ltd for $367.64 million. Collectively it has invested more than $650 million in the last three years to buy out commercial real estate assets across the country.

(Edited by Joby Puthuparampil Johnson)

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Blackstone Advisors India Pvt. Ltd. is a private equity and venture capital firm. It provides finance for leveraged buyouts, turnarounds, corporate partnerships, industry consolidations, start-ups, recapitalizations and growth capital transactions. The firm seeks to invest in communications, energy, media and entertainment, healthcare, financial services, hospitality and travel, manufacturing, technology, transportation, oil refining, construction, consumer and retail, food and beverage, packaging and pharmaceutical sectors. It prefers to invest in North America, Western Europe, Latin America, emerging European markets and India. The company was founded in 1987 and is based in Mumbai, India.

(Panchshil Realty Pvt. Ltd.)

Panchshil Realty Pvt. Ltd. is engaged in the business of construction, real estate development and project management. It develops mix-trade, IT & corporate parks, SEZs, high end residential villas, serviced residences and hotel and hospitality projects. The company was founded in 1996 and is based in Pune, Maharashtra.

Head office:
Pune
Year Founded:
1996
Management:
Atul Ishwardas Chordia

Express Towers Pvt. Ltd. is engaged in developing real estate projects. It undertakes residential projects. The company was founded in 1986 and is based in Mumbai, Maharashtra.

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