Private equity giant Blackstone has sold part of its stake in a real estate investment trust formed with Bengaluru developer Embassy Group, a little more than a year after taking it public.
Embassy Office Parks REIT had floated its initial public offering in March last year and sold 71 million units at Rs 300 apiece. Blackstone hadn’t sold any units at the time, and its units were locked in for one year until March 31, 2020.
The world’s biggest PE firm has now sold nearly 67.2 million Embassy REIT units, representing 8.7% of the total ownership, for Rs 2,275 crore ($300 million at current exchange rates).
Blackstone sold shares on the BSE and NSE to a mix of existing and new institutional investors.
Capital Group bought nearly 1 million units for Rs 321 crore, stock-exchange data showed. Canadian investment firm Brookfield, Norway’s sovereign wealth fund and Japanese asset management firm Nomura are some of the investors in Embassy REIT.
Units of the real estate investment trust closed at Rs 356.27 apiece on the BSE on Wednesday, down 2.33% from the previous close. The price of the units has fallen 31% from the one-year high of Rs 518 apiece in March.
After the share sale, Blackstone will own 46.3% stake in the REIT and remains its single-largest shareholder.
Blackstone previously owned 55% of the units in Embassy Office Parks REIT. The investment vehicle was the first REIT in India to list its units on the stock exchanges through a Rs 4,750 crore IPO in March 2019. The IPO was covered a little more than two times.
Jonathan Gray, president and chief operating officer at Blackstone, said in a statement the PE firm is a big believer in India’s potential and is optimistic about the REIT’ future.
“We have significant confidence in the office sector and Embassy REIT given growing demand from domestic and global companies for Indian talent, particularly in technology hubs like Bangalore,” he said.
An Embassy REIT spokesperson said the transaction increases the REIT’s public float, enhances liquidity and diversifies its investor base.
The Blackstone-Embassy joint venture was formed in 2012 with an aim to develop office projects. They had filed an application with the Securities and Exchange Board of India to form the REIT in 2016.
The REIT was set up in March 2017. It operates in Bengaluru, Pune, Mumbai and Noida. It is Asia’s largest REIT in terms of portfolio size at 33 million sq ft.