Blackstone set to buy 1 million sq ft office space from L&T Realty

US-based private equity giant Blackstone is in the final stage of talks with L&T Realty to buy 1 million sq ft of office property in Seawoods in Navi Mumbai.
 
Market sources said the deal could be valued at Rs 900-1,000 crore, given rents in the area. Sources in L&T Realty said the company was expecting Rs 1,400 crore.
 
The property is part of a 40 acre integrated transit-oriented development at Seawoods railway station. Earlier, Blackstone bought a 1 million sq ft mall for Rs 1,400 crore from L&T Realty in the same project. Blackstone recently inaugurated the Seawoods Grand Central Mall.

 

L&T Realty has 1.5 million sq ft of office space in the project and has sold 300,000-400,000 sq ft to various buyers.
 
“Commercial real estate is not core for T&T Realty, which is focusing on residential projects. That is why it is selling such properties,” a source said.
 
In 2015, L&T Realty sold its 1.8 million sq ft commercial project in Chandigarh, including Elante Mall, a Hyatt hotel and offices, to the Carnival group for Rs 1,785 crore. That was the largest commercial real estate deal of that year.
 
L&T Realty Chief Executive Officer Srikant Joshi declined to comment on the deal with Blackstone. A spokesperson for Blackstone said, “As a matter policy, Blackstone does not comment on media/market speculations.”

 
Sources said L&T Realty was also in talks with Blackstone and Brookfield to sell office assets in Powai in Mumbai’s eastern suburbs, but this could not be independently verified. L&T Realty has developed 1.5 million s q ft in Powai and has the potential to develop another 3-4 million sq ft.
 
Blackstone is the largest owner of office space in the country at 70 million sq ft. It has invested over $3 billion in Indian real estate since 2011. Two of its joint ventures, one with the Embassy group in Bengaluru and and another with Panchshil of Pune, are planning to float real estate investment trusts, or Reits.

Early this year, Blackstone bought a 15 per cent stake in the rental arm of the K Raheja Corp for Rs 1,700 crore. It was also in the reckoning to buy a stake in DLF’s subsidiary, DLF Cybercity, which was sold to Singapore's GIC.
 
Blackstone is in the final stages of negotiations to buy commercial property from the Carnival group in Chandigarh. The deal is expected to be worth Rs 2,200 crore.
 
Ramesh Nair, country head at JLL, said Blackstone had been acquiring Grade-A lease-earning office properties over the past few yeaRs and the strategy had paid off. "This is in line with their Reit listings plan. Office property prices have not crossed their previous peak. All quality office properties are set to gain considerably," he added.

 
Ashok Kumar, managing director at commercial realty services firm Gennext Partners, said Blackstone was acquiring real estate across the globe to generate attractive returns for investoRs over the long term.
 
Blackstone is poised to become the second largest owner of malls in the country after it bought two malls in Indore in a deal estimated at Rs 1,200 crore. It has 3.7 million sq ft of mall space and has set up a company, Nexus Malls, to manage and operate these.