Public listed developer Prestige Estates Projects Ltd will buy back joint venture partner Red Fort Capital's over 60 per cent stake in business park Exora, the company said on Tuesday.
It did not disclose the deal amount but added that the transaction will result in one of the largest exits in the real estate private equity space. Sources had earlier indicated that the asset is valued around $150 million which would give the PE firm under $100 million.
Exora, situated on the outer ring road in Bangalore, has been completely developed and leased to MNCs like JPMorgan, Juniper Networks, LinkedIn, PricewaterhouseCoopers, Schneider Electric and Bosch.
Irfan Razack, chairman and managing director of the Prestige group, said, “The asset has matured and is completely leased out to marquee clients. This acquisition is a strategic decision and will result in increase in asset base and contribute to the company’s annuity stream of income.”
The firm had previously said it is in talks for the buy-back.
The developer holds 32.46 per cent in the SPV while Red Fort has 62.54 per cent stake and the rest is held by individual investors.
The deal had elicited interest from marquee investors, including GIC. VCCircle had reported that GIC was leading the race to clinch the deal while Prestige itself was ready to buy out the stake from Red Fort.
The asset, which brings roughly Rs 125 crore in rental income annually, is being developed under a special purpose vehicle (SPV) Exora Business Parks Pvt Ltd (EBPL). It is located at Marathahalli on the outer ring road in Bangalore and is spread over 22 acres of land.
The development comprises three buildings (B1, B2 & B3) totalling 3.03 million sq ft of built-up area and 2.12 million sq ft leasable area, of which two buildings (B1 & B3) are already completed and leased out.
Red Fort Capital had invested in the project in 2007 from its first fund. Recently, Subhash Bedi, who jointly created and ran one of India's top realty PE firms for almost a decade before splitting with his partner, floated Rising Straits Capital. This firm has bequeathed all the existing portfolio firms of Red Fort Capital.
Kalyan Chakrabarti, managing director, Rising Straits Capital, recently told VCCircle that the firm is now focusing on creating exits to repatriate money to its own investors besides looking to invest afresh on a project-to-project basis.
Subhash Bedi, chairman, Rising Straits Capital, said, “We have been equity partners in this project for more than eight years, and have supported it through the complete development and leasing lifecycle. The transaction is an example of value creation through a long-term association with a trusted development partner.”