US-based private equity firm Blackstone Group LP bought the 8-storey building, One BKC, from real estate firm Radius Developers in Mumbai’s Bandra Kurla Complex (BKC)
In what could quite possibly be the year’s largest commercial real estate deal, US-based private equity firm Blackstone Group Lp has acquired a marquee office building in Mumbai’s Bandra Kurla Complex (BKC) for ₹2,500 crore.
Owned and developed by Mumbai-based real estate firm Radius Developers, the eight-storey building, One BKC, is spread across 700,000 sq.ft and is fully leased out to a prestigious clientele list which includes multinational companies such as Bank of America, Facebook, Merril Lynch, Cisco and Amazon.
It’s a much sought after grade A building in Mumbai. There is no building like this in BKC, which is 100% let out, especially to large multinational companies,” said the first person mentioned above. A spokesperson of property advisory firm ANAROCK Property Consultants, which acted as adviser to the deal, also declined to comment.”
The US firm’s deal apparently is on its commercial real estate purchase spree, purchasing marquee projects and building a commercial real estate portfolio – which also includes a plan on buying out Adani Realty’s 800,000 sq.ft commercial project, Inspire, for around ₹1,900 crore – located in the same area. So far, Blackstone has invested $5.4 billion across 33 investments in India’s real estate sector. Of this $4 billion has been invested in office assets alone.
The deal will also bring a bevy of changes to the project’s owner, which is expected to lead to the exit of Indiabulls Housing Finance from the One BKC project – considering an effective buyout, since Radius had taken a loan of around ₹1,600 crore from Indiabulls to develop the office building.
In March, Blackstone-backed Embassy group launched India’s first real estate investment trust (REIT) worth around ₹4,750 crore. The Embassy Office Parks REIT portfolio comprised around 33 million sq.ft of office space spread across seven office parks and four prime city-centre office buildings across India, including in Bengaluru and Mumbai.
In 2018, Blackstone had signed a slew of deals with Indiabulls Real Estate Ltd. Some of the big deals in the last one year include the buying out of a 50% stake in Indiabulls’ flagship office properties in central Mumbai—One Indiabulls Centre and Indiabulls Finance Centre—for $730 million. It also acquired the Mumbai-based firm’s Chennai commercial asset for ₹ 900 crore.
The investments in commercial real estate in India can be attributed to the increase in the number of multinational offices and a general spurt in industry, wherein international organizations would look to capitalize on the growing demand for commercial office spaces in India.
Furthermore, the investment trend is centred in metropolitan cities, like Bangalore and Mumbai, both of which saw an increase of 17% and 5% year-on-year in office rents, respectively, in the first half of this calendar year.