Blackstone expands mall portfolio with Rs 450-crore buy

Global private equity giant Blackstone has bought a 800,000 square feet operational mall in Coimbatore, Tamil Nadu. The value of the deal is about Rs 450 crore.

The previous owner of the property, called Brookfields, was Brookfields Estates, a local developer.

Blackstone's new mall company, Nexus Malls, bought Brookfields, said a source. This is the fourth mall Blackstone has bought in the country in the last two years. It is a part of its plans to hold income-producing malls and list them as real estate investment trust (Reit), the source said.

Neither Blackstone nor Brookfields responded to queries.

Blackstone other three malls have an area of 3 million square feet. It is looking to buy more operational as well as land parcels, which it would develop with land owners, the source said. Last year, Blackstone acquired AlphaOne, which has malls in Ahmedabad and Amritsar.

This year, Blackstone bought a 1 million-sq ft mall in the Seawoods area in Mumbai from L&T Realty for about Rs 1,400 crore. According to sources, its mall portfolio is valued at about Rs 1,800 crore.

Blackstone, sources said, has set up a separate team for malls, which is headed by Vikram Garg, who was with Religare earlier. They have also set up a separate office in Vashi in Navi Mumbai. About 75 people work in the malls and offices of Nexus Malls.

"Normally they like 100 per cent ownership but they are also open to floating joint ventures," the source said.

Globally, Blackstone has $101 billion of assets in real estate and owns 180 million sq ft of retail assets.

They own Multi Corporation in Europe, which owns or manages 161 shopping centres, factory outlets and retail parks on the continent.

In fact, many mall developers are looking to float partnership with PE funds.

While Mumbai-based Oberoi Realty is in talks with Morgan Stanley and others to float a Rs 1,000-crore platform, Ruia-owned Phoenix Mills is talking to Canada's CPPIB to buy land and develop malls.

Despite over a dozen malls shutting down last year, property developers such as Lodha, Oberoi, and Phoenix Mills are again looking to build new malls.

About 7.9 million square feet of new mall space is expected to be added this year, which is almost double from last year, real estate consultant JLL said in a presentation recently.

The total number of malls in the country will go up to 720 in 2016 from 542 in 2014, JLL said.

ALL-ROUND EXPANSION

n This is the fourth mall bought by Blackstone in the country in the last two years
n It is part of its plans to hold income-producing malls and list them as real estate investment trust (Reit)
n Blackstone owns three malls in the country with an area of 3 mn sq ft

n Last year, it acquired AlphaOne malls which has malls in Ahmedabad and Amritsar. This year, it bought a 1 mn sq ft mall in Seawoods from L&T Realty for about Rs 1,400 crore.
n According to sources, its mall portfolio is valued at about Rs 1,800 crore.