Embassy, Blackstone pick 60% stake in Vrindavan TechVillage at an enterprise value of $324M

In one of the largest deals in Indian commercial realty space, a joint venture between southern realty major Embassy Group and Blackstone has acquired majority stake in Vrindavan TechVillage (VTV), a large business park in Bangalore, from three of the four stakeholders.

The deal is routed through Embassy Office Parks, an equal equity JV between Embassy Group and Blackstone. Embassy Office Parks picked 60 per cent stake in a deal which valued the property at Rs 1,951 crore ($324 million), including debt, the banker involved in the transaction told VCCircle.

The park has been renamed Embassy TechVillage.

Embassy TechVillage is a 106 acre development and is strategically located at the heart of Bangalore’s IT corridor, on the Outer Ring Road.

Jitendra Virwani, chairman and managing director, Embassy Group, said, “Post the Embassy TechVillage acquisition, we will boast of over 20 million sq ft of commercial real estate space. We now have over 150,000 park users across four business parks and enjoy strong and robust tenant relationships with over 100 blue chip, MNC and Indian companies in the portfolio.”

Tuhin Parikh, senior managing director, Blackstone Real Estate Group, said “The acquisition of Embassy TechVillage is a significant milestone in strengthening our Embassy Office Parks portfolio and expanding our footprint across the country.”

Redwoods Projects was the sole transaction advisor for this deal.

Amit Porwal, COO, Redwoods Projects Pvt. Ltd, told VCCircle that the deal has created exits for the chairman of Vikas Telecom Limited (Mithilesh Kumar Tripathi), the developer of Vrindavan TechVillage (Singapore-headquartered Assetz Group) and north-based HNI Santosh Garg. “Another stake holder Rakesh Garg continues to hold roughly 40 per cent stake in the property,” he added.

Porwal feels that the Bangalore market, especially commercial segment, is going to pick a lot of pace after elections and deal activity will also gain momentum.

Michael Holland, CEO of Embassy Office Parks, stated, “Embassy TechVillage perfectly complements our existing business parks at Bangalore - Embassy Golf Links and Embassy Manyata Business Park - allowing Embassy Office Parks to offer a range of premises options across strategic business locations in Bangalore.”

He added that Embassy TechVillage is planned as an integrated project with commercial components as well as retail and residential spaces.  It has a potential built-up-office area in excess of 15 million sq ft, with 1.9 million sq ft already completed.

“We will also be constructing build-to-suite office spaces for a number of our potential clients, both SEZ & non-SEZ, to help them optimise their costs and derive better value,” said Holland.

Comprising more than 20 million sq ft of commercial space, the Embassy Office Parks portfolio includes business parks in Bangalore such as Embassy Golf Links at Domlur, Embassy Manyata Business Park at Hebbal, as well as Embassy TechZone at Pune.

According to a report by Cushman and Wakefield, India is likely to witness the second highest demand for office space in 2014, among the top 30 cities in the Asia-Pacific region. Bangalore is expected to be the biggest market in the country due to expansion of IT, ITeS and other sectors and will throw up demand for 6.3 million sq ft of office space this year, it added.

(Edited by Joby Puthuparampil Johnson)

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