Blackstone & Embassy to buy Goldman Sachs’ 73% stake in Bangalore realty project

Private equity major Blackstone Group and realty firm Embassy Property Developments Pvt Ltd have agreed to acquire 73 per cent stake owned by Goldman Sachs' managed real estate fund Whitehall, in Bangalore-based City View Bangalore Properties Private Limited, for an undisclosed amount.

Dayanand Pai-controlled Century Real Estate Holdings Pvt Ltd currently owns the remaining 27 per cent stake in City View Bangalore Properties, which is developing a 6.5 acre project that will have Four Seasons Hotel and Private Residences in Bangalore.

The nearly 1-million sq ft lifestyle project, designed in a mixed-use format, comprises of a 230-key Four Seasons hotel, 110 luxury branded residences, 60,000-sq ft of luxury retail space, and 150,000-sq ft of office space.

Email queries to Blackstone and Embassy Group for more information and deal value did not elicit a response.

As per a Mint report, the deal has been valued at around Rs 630 crore (around $102 million), which could mark a sale at par in dollar terms. Goldman Sachs' Whitehall fund had acquired the stake in the project for Rs 500 crore (approximately $104 million then) in 2009.

Later in 2012, Goldman Sachs said that it plans to exit the project by selling off its entire stake. According to several media reports, RMZ Corp, Oberoi Realty and Nitesh Estates were among the bidders who were interested in acquiring the stake.

Last month, construction firm Shapoorji Pallonji & Co Ltd issued a public notice and threatened to take a legal action against Goldman Sachs and Century Real Estate Holdings for abandoning the project site and disconnecting electricity supply at the site. The Mumbai-based construction company is claiming dues of Rs 82 crore.

Blackstone has a strategic partnership with Embassy Group for joint investment in properties. Early this year they acquired majority stake in Vrindavan TechVillage (VTV), a large business park in Bangalore, from three of the four stakeholders. The deal was routed through Embassy Office Parks, an equal equity JV between Embassy Group and Blackstone.

J Sagar Associates (JSA) advised Goldman Sachs while Embassy and Blackstone were represented by a team from Amarchand Mangaldas, Bangalore while Blackstone was also represented by Simpson Thacher & Bartlett, in the transaction.

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