Blackstone Group, the world's largest alternative investment asset manager, has agreed to buy a retail-cum-office property of L&T Realty Ltd in Mumbai as it goes aggressive on its plan to build a portfolio of malls in India, two people familiar with the development told VCCircle.
The private equity giant will acquire the Seawoods Grand Central property in Navi Mumbai from the unit of engineering firm Larsen & Toubro Ltd. The asset is spread over 40 acres and has space for offices, retail, entertainment and hospitality services.
“The deal involves acquisition of the whole asset including the retail and office space,” said one of the persons cited above. The person, who works at a private equity firm, spoke on the condition of anonymity. But the second person, a senior executive at a real estate consultancy firm, said it is not clear if the deal includes office space.
The people said negotiations had been going on for the past few months and a final agreement was signed recently.
An email written to Blackstone late evening did not immediately elicit a response.
The deal value could not immediately be ascertained.
This is Blackstone's second attempt to acquire an asset of L&T and comes soon after it was edged out by Carnival Group to buy a retail property in Chandigarh.
Industry insiders say that Blackstone, one of the biggest owners of commercial real estate in India, is now aggressively working on building a retail portfolio. It brought two mall properties, one each in Amritsar and Ahmedabad, in its kitty with the acquisition of Gurgaon-based Alpha G:Corp and is aggressively scouting for deals in the space.
The retail segment, which has remained a laggard so far among other real estate verticals, is likely to pick up pace with growth in consumption and more foreign brands planning to enter India. According to a report by JLL India, PE investment into retail properties was $39 million in 2015 and this could increase to around $75-80 million this year. It added that PE money may also go into select mall investments, especially in under-represented markets, or for buyout of mature assets.