Exclusive-Blackstone to offer $400 million stake in Indian REIT Embassy; ADIA eyes investment-sources By Reuters

By M. Sriram, Aditya Kalra and Aditi Shah

MUMBAI (Reuters) – Blackstone (NYSE:) Inc will offer a stake worth as much as $400 million in Embassy Office Parks REIT, India’s greatest realty financial investment trust, through Indian stock market block offers, 3 sources knowledgeable about the matter informed Reuters.

Abu Dhabi’s sovereign wealth fund, among the world’s biggest, is most likely to get a minimum of half of the stake that Blackstone is to offer, among the sources stated.

Embassy Office Parks, India’s initially REIT to note in 2019, owns and runs more than 42 million square feet portfolio of workplace parks and office complex in cities such as Bengaluru and Mumbai. It is the biggest workplace REIT in Asia by location.

In the block offers being intended on the Indian exchanges early next week, Blackstone’s sale would deserve about $300-400 million, stated the sources, all of whom decreased to be called as the conversations are personal and delicate.

Spokespersons for Blackstone and Bengaluru-based Embassy did not right away react to an ask for remark. A representative for Abu Dhabi Investment Authority (ADIA) in Abu Dhabi decreased to comment.

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

Blackstone presently has a 32% stake in the Embassy REIT and at the existing market price the proposed sale by Blackstone would represent 7.2% to 9.6% of its stake, according to Reuters computations.

The obstruct trade will be Blackstone’s 3rd stake sale in Embassy, following 2 such sales in 2020 and 2021, where the personal equity group has actually offered shares worth more than $500 million jointly.

Blackstone has actually invested more than $11 billion in Indian business and properties throughout the years, however has actually been cutting its interests in time in Indian REITs.

Earlier this year, it offered its whole stake in India’s Mindspace Business Parks REIT for $235 million.

The rates of the block offers is most likely to be settled early next week, prior to the block trade is carried out, the sources included. The last shape of the block offers and property sale go through modifications.

ADIA INTEREST

ADIA is most likely to get about $200 countless Blackstone’s stake sale, with talks likewise continuous with other possible financiers, the very first source stated.

For ADIA, the financial investment would broaden its interest in the Indian workplace market. As the COVID-19 pandemic has actually subsided, lots of employees have actually gone back to workplaces, making office an appealing bet for financiers.

Two of the sources stated ADIA prepares to purchase the stake in the Embassy REIT through a $590 million fund it established in June with India’s Kotak Investment Advisors in business realty.

In June, ADIA stated the fund would concentrate on “opportunities associated with long-term demand for Indian office space, which is being driven by global organisations seeking to capitalise on the country’s skilled workforce.”

Embassy has actually selected Morgan Stanley (NYSE:) and Bank of America (NYSE:) Securities to run the procedure, the 3 sources stated.

“Banks are doing full-on marketing to make sure book is well covered,” stated the 3rd source with direct understanding.

Bank of America decreased to comment, while Kotak and Morgan Stanley did not right away react.