Blackstone acquires stake in Forum group's retail space for Rs 2.50 bn

Forum Group, with an investment or about Rs 14 billion, is in talks with Blackstone for investments in retail project

Global private equity firm Blackstone Group has acquired a majority stake in one of the retail ventures promoted by the Forum Group.

The private equity (PE) firm has invested around Rs 2.5 billion, which translates into about 75 per cent stake in retail space in Esplanade Mall by Forum Group in Bhubaneswar, according to sources close to the development.

Forum Group, which is currently developing around three million square feet of retail space across east India, with an investment or about Rs 14 billion, is in talks with Blackstone for investments in other retail projects as well. Forum Group is expecting to deliver about one million square feet of retail space every year over the next three years.

In recent past, Blackstone has been increasingly beefing up investments in the retail real estate. Its investment in Forum is one of the first global PE investment in retail space in the east.

"We will be delivering roughly one million square feet of retail infrastructure development every year for the next three years. We expect the joint platform with Blackstone will acquire more such properties in the future," Vidyut Saraf, deputy managing director, Forum Group told Business Standard.

At present, Forum Group has three operational malls, two in West Bengal and one in Bhubaneswar, totaling about 1.2 million square feet of developed area.

According to Saraf, the goods and services tax (GST) has made east India a favourable destination for major retailers due to ease in cross-state movements. Further, with markets in north and west facing a saturation, many retailers are now coming east for expansion.

"East India has long been under-served with regards to retail, both in terms of presence of retailers, as well as the presence of retail-focused capital. This is likely to change in the next few years, as several retailers have already started to establish and consolidate their presence in the east," said Saraf.