Blackstone, the world's largest alternative investment asset manager, has completed a deal to acquire two retail assets of Gurgaon-based developer Alpha G:Corp, taking the first step towards creating a portfolio of shopping malls in India, people close to the development told VCCircle.
VCCircle first reported in September that Blackstone, the biggest owner of commercial property in India, was looking to acquire some assets of the developer.
The malls housed under AlphaOne brand are located in Amritsar (Punjab) and Ahmedabad (Gujarat). Spread across 12 acres, AlphaOne Amritsar is a mixed-use project with over 550,000 sq. ft dedicated for retail and entertainment segments.
The property in Ahmedabad has close to one million sq ft fully leased out with shopping and entertainment segments covering an area of 708,208 sq. ft.
A spokesperson for Blackstone said the firm wouldn’t like to comment on market speculation. Alpha G:Corp couldn’t immediately be reached for a comment. A spokesperson for property consultancy Jones Lang LaSalle India, which had the mandate for the deal, wasn’t available for a comment.
VCCircle couldn’t immediately ascertain the deal size. However, other media reports said Blackstone shelled out roughly Rs 800 crore for the two properties.
Industry sources had indicated that talks were going on for a complete buyout of the developer but the negotiations didn’t pan out that way.
Started in 2003 by five professionals, Alpha G:Corp has seen some of its founding members move out over the years. Its focus is spread across development, mall management and facility management. It has developed residential assets in Gurgaon, Karnal, Amritsar and Ahmedabad apart from commercial and industrial developments.
Meanwhile, with this acquisition, Blackstone has set the ball rolling when it comes to buying out malls at a time when this segment of real estate has failed to buck up from the prolonged slump.
The bull run a decade ago had led to oversupply in terms of mall assets and many developers are sitting with partly or fully vacant assets. A few exits have been created for PE investors in retail properties primarily through promoter buybacks but many have been sub-par in terms of investment value.
Industry watchers say Blackstone has set its eyes on the retail segment and it is gradually going to build on it. Sources indicate that it is looking at the retail portfolio of another investment firm and is in early talks to clinch a deal.
On the commercial front, it has one of the largest pools of assets in India and surpassed biggies like DLF Ltd with the recent acquisition of Mumbai asset 247 Park for Rs 1,060 crore and two IT parks in Noida and Pune from IDFC Alternatives for Rs 1,100 crore.
It also bought an office asset, Oxygen Boulevard, from North India-based developer The 3C Company for roughly Rs 600 crore. With assets over 30 million sq ft in its kitty, it is expected to pool in its assets and list them under real estate investment trusts.