© Reuters. FILE PHOTO: A person walks alongside a wall overlooking the central Mumbai’s monetary district skyline, India, March 9, 2017. REUTERS/Danish Siddiqui/File Picture
By M. Sriram, Aditya Kalra and Aditi Shah
MUMBAI (Reuters) – Blackstone (NYSE:) Inc will promote a stake price as much as $400 million in Embassy Workplace Parks REIT, India’s greatest actual property funding belief, through Indian inventory trade block offers, three sources conversant in the matter advised Reuters.
Abu Dhabi’s sovereign wealth fund, one of many world’s largest, is prone to decide up at the very least half of the stake that Blackstone is to promote, one of many sources mentioned.
Embassy Workplace Parks, India’s first REIT to checklist in 2019, owns and operates greater than 42 million sq. ft portfolio of workplace parks and workplace buildings in cities resembling Bengaluru and Mumbai. It’s the largest workplace REIT in Asia by space.
Within the block offers being deliberate on the Indian exchanges early subsequent week, Blackstone’s sale can be price about $300-400 million, mentioned the sources, all of whom declined to be named because the discussions are personal and delicate.
Spokespersons for Blackstone and Bengaluru-based Embassy didn’t instantly reply to a request for remark. A spokesperson for Abu Dhabi Funding Authority (ADIA) in Abu Dhabi declined to remark.
Shares within the Embassy REIT closed at 354.42 Indian rupees on Friday in Mumbai, giving it a market capitalisation of $4.15 billion.
Blackstone at the moment has a 32% stake within the Embassy REIT and on the present market worth the proposed sale by Blackstone would characterize 7.2% to 9.6% of its stake, in response to Reuters calculations.
The block commerce will probably be Blackstone’s third stake sale in Embassy, following two such gross sales in 2020 and 2021, the place the personal fairness group has bought shares price greater than $500 million collectively.
Blackstone has invested greater than $11 billion in Indian corporations and property through the years, however has been trimming its pursuits over time in Indian REITs.
Earlier this yr, it bought its complete stake in India’s Mindspace Enterprise Parks REIT for $235 million.
The pricing of the block offers is prone to be finalised early subsequent week, earlier than the block commerce is executed, the sources added. The ultimate form of the block offers and asset sale are topic to modifications.
ADIA is prone to decide up about $200 million of Blackstone’s stake sale, with talks additionally ongoing with different doable traders, the primary supply mentioned.
For ADIA, the funding would develop its curiosity within the Indian workplace market. Because the COVID-19 pandemic has waned, many employees have returned to workplaces, making workplace area a lovely guess for traders.
Two of the sources mentioned ADIA plans to purchase the stake within the Embassy REIT by means of a $590 million fund it arrange in June with India’s Kotak Funding Advisors in industrial actual property.
In June, ADIA mentioned the fund would concentrate on “alternatives related to long-term demand for Indian workplace area, which is being pushed by international organisations looking for to capitalise on the nation’s expert workforce.”
Embassy has appointed Morgan Stanley (NYSE:) and Financial institution of America (NYSE:) Securities to run the method, the three sources mentioned.
“Banks are doing full-on advertising to ensure ebook is properly coated,” mentioned the third supply with direct information.
Financial institution of America declined to remark, whereas Kotak and Morgan Stanley didn’t instantly reply.