Distinctive: Blackstone to promote $400 million stake in Indian REIT Embassy, ADIA eyes expenditure

MUMBAI, Sept 23 (Reuters) – Blackstone Inc will promote a stake really worth up to $400 million in Embassy Business Parks REIT (EMBA.NS), India’s greatest authentic estate expenditure believe in, by using Indian stock exchange block offers, 3 resources familiar with the subject advised Reuters.

Abu Dhabi’s sovereign wealth fund, a single of the world’s greatest, is most likely to choose up at least 50 percent of the stake that Blackstone is to promote, one particular of the resources claimed.

Embassy Office Parks, India’s 1st REIT to record in 2019, owns and operates additional than 42 million square feet portfolio of office parks and place of work structures in metropolitan areas these types of as Bengaluru and Mumbai. It is the premier business office REIT in Asia by region.

In the block offers remaining prepared on the Indian exchanges early next 7 days, Blackstone’s sale would be value about $300-400 million, mentioned the resources, all of whom declined to be named as the conversations are non-public and delicate.

Spokespersons for Blackstone and Bengaluru-centered Embassy did not promptly respond to a ask for for comment. A spokesperson for Abu Dhabi Investment decision Authority (ADIA) in Abu Dhabi declined to comment.

Shares in the Embassy REIT closed at 354.42 Indian rupees on Friday in Mumbai, supplying it a industry capitalisation of $4.15 billion.

Blackstone at this time has a 32% stake in the Embassy REIT and at the recent industry price the proposed sale by Blackstone would stand for 7.2% to 9.6% of its stake, according to Reuters calculations.

The block trade will be Blackstone’s 3rd stake sale in Embassy, pursuing two this kind of product sales in 2020 and 2021, where the personal equity team has marketed shares truly worth a lot more than $500 million collectively.

Blackstone has invested additional than $11 billion in Indian firms and assets around the a long time, but has been trimming its interests over time in Indian REITs.

Earlier this year, it sold its complete stake in India’s Mindspace Enterprise Parks REIT (Mins.NS) for $235 million.

The pricing of the block offers is possible to be finalised early upcoming 7 days, prior to the block trade is executed, the resources included. The ultimate shape of the block deals and asset sale are matter to adjustments.

ADIA Curiosity

ADIA is probably to decide on up about $200 million of Blackstone’s stake sale, with talks also ongoing with other possible buyers, the to start with source reported.

For ADIA, the expense would develop its curiosity in the Indian place of work current market. As the COVID-19 pandemic has waned, numerous staff have returned to places of work, earning business house an attractive wager for buyers.

Two of the sources mentioned ADIA strategies to invest in the stake in the Embassy REIT via a $590 million fund it set up in June with India’s Kotak Investment decision Advisors in commercial actual estate.

In June, ADIA explained the fund would aim on “alternatives connected with extensive-term desire for Indian business office room, which is staying driven by international organisations in search of to capitalise on the country’s skilled workforce.”

Embassy has appointed Morgan Stanley and Lender of The united states Securities to operate the course of action, the three sources said.

“Financial institutions are undertaking full-on advertising and marketing to make confident e book is well included,” said the third source with immediate know-how.

Lender of The united states declined to remark, when Kotak and Morgan Stanley did not immediately answer.

Reporting by M. Sriram, Aditya Kalra and Aditi Shah More reporting by Scott Murdoch in Hong Kong and Abhirup Roy in Mumbai. Editing by Jane Merriman

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