Private equity giant Blackstone has agreed to buy certain assets from Bengaluru-based Prestige Project Estates in a deal seen as one of India’s biggest real estate transactions.
The announcement was made in a stock market notification by the developer.
The statement comes soon after VCCircle reported that the proposed deal had added 10 malls and two hotels.
The proposal was initially limited to office assets only.
The addition had made India’s biggest proposed real estate portfolio even bigger, taking the deal value to Rs 12,750 crore ($1.7 billion) from Rs 10,500 crore ($1.4 billion).
The company, however, did not mention the deal size.
This is Prestige’s second attempt at monetising its rent-yielding assets through a mega deal. In 2018, it had signed a term sheet with GIC for a deal to pick up stakes across a bunch of projects, but it fell through because of a valuation mismatch.
In fact, the developer has been preparing for a deal for its rental assets for quite some time. In the last 2-3 years, it has streamlined a lot of its projects and bought out investors across special purpose vehicles (SPVs) in the run-up to this mega deal.
In the residential segment, Prestige has so far completed 89 million square feet while its under-construction portfolio is roughly 32 million sq ft.
In the commercial segment, it has so far delivered 36 million sq ft while under-construction is 15 million sq ft.
The developer has launched back-to-back projects in recent months in the residential segment. Over the last two months, it has launched Waterford in Whitefield, Bengaluru; Prestige Ocean Crest in Goa and Prestige Primrose Hills in Bengaluru.
Blackstone is one of the world’s leading investment firms. In April last year, Blackstone-sponsored REIT Embassy Office Parks made its debut on bourses, giving the country its first publicly listed REIT (real estate investment trust).
Its second co-sponsored REIT – Mindspace REIT -- made a strong debut in early August this year.
The firm has a separate vertical for retail assets housed under Nexus Malls. Currently, there are nine malls under the Nexus Malls portfolio, spanning 5.5 million sq ft of Grade A retail space in India.
Recently, it set up a platform with Hiranandani Group to develop and manage warehousing assets in the country.
The Prestige-Blackstone deal marks a significant development in India’s real estate market at a time when the work-from-home trend is looming over rent-yielding office assets. The ecosystem will also soon see the completion of another mega deal with Canada’s Brookfield acquiring a bunch of office and co-working assets from Bengaluru developer RMZ.