Private equity major Blackstone, which has been active in striking large-sized realty deals in the country, has signed a term sheet to acquire the commercial real estate asset of called 247 Park for Rs 1,001 crore ($169 million).
Sources close to the development said, “The term sheet has been signed a fortnight ago and that the deal is expected to be closed by mid-July.”
The news was first reported by Reuters.
The commercial realty asset belongs to infrastructure major Hindustan Construction Company’s real estate business which has been jointly developed with IL&FS Milestone Fund.
In an emailed response Blackstone declined to comment on the story. An email sent to HCC did not elicit any response at the time of posting this report.
The property, spread across 1.8 million square feet, has been developed in the upcoming IT corridor at Vikhroli (West) in Mumbai.
In June, 2010, IL&FS Milestone Realty Advisors, a joint venture between Milestone Capital Advisors and IL&FS Investment Managers Ltd (IIML), acquired 74 per cent stake in 247 Park, by valuing the asset at close to Rs 775 crore, making it the largest investment by a REIT-structured fund in India at that time.
With the money coming in from Blackstone, HCC real estate which is leveraged at this moment, will take home close to Rs 175 crore from this transaction. The 247 Park project has a debt of Rs 300 crore which will be paid off with the transaction amount. The infrastructure company has a stand-alone debt of about Rs 4,600 crore.
Besides the 247 Park transaction, Blackstone is in the final stage of acquiring Vrindavan Tech Village—a special economic zone for information technology companies—in suburban Bangalore. Embassy Property Developments Pvt Ltd and HDFC Property Fund are the other investment partners in the deal pegged at Rs 1,951 crore.
It is estimated that Blackstone has invested more than $550 million to date in real estate assets across the country. The transactions have been undertaken in the commercial real estate space which has become the latest attraction for fund managers who are looking at capitalisation rate of 9.5-11 per cent on assets.
(Edited by Joby Puthuparampil Johnson)