Exclusive: Blackstone to sell $400M stake in Indian REIT Embassy, ​​ADIA looks into investment

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  • Blackstone to reduce interest in Indian REIT resources
  • Abu Dhabi’s wealth fund considers investing in Embassy REIT
  • Blackstone’s $400 million sale will mark its third sale at Embassy
  • Block deals on Indian exchanges set early next week – sources

MUMBAI, September 23 (Reuters) – Blackstone Inc will sell up to $400 million of its stake in Embassy Office Parks REIT (EMBA.NS), India’s largest real estate investment trust, through Indian stock market block agreements. He told Reuters.

Abu Dhabi’s sovereign wealth fund, one of the world’s largest, will buy at least half of what Blackstone will sell, one source said.

As India’s first listed REIT in 2019, Embassy Office Parks owns and operates a portfolio of more than 42 million square feet of office parks and office buildings in cities such as Bengaluru and Mumbai. By region, the largest office in Asia is a REIT.

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He said the sale of Blackstone will be worth around $300-400 million, in block deals scheduled for early next week on Indian exchanges.

Spokesmen for the Blackstone and Bengaluru-based Embassy did not immediately respond to a request for comment. A spokesperson for the Abu Dhabi Investment Authority (ADIA) in Abu Dhabi declined to comment.

Shares of Embassy REIT closed at INR 354.42 in Mumbai on Friday, giving it a market capitalization of $4.15 billion.

Blackstone currently owns a 32% stake in Embassy REIT and according to Reuters calculations, the Blackstone proposed sale would represent between 7.2% and 9.6% of its shares at current market value.

The block trading will be Blackstone’s third share sale in Embassy, ​​following two such sales in 2020 and 2021, when the private equity group collectively sold more than $500 million of shares.

Blackstone has invested more than $11 billion in Indian companies and assets over the years, but has been reducing its interests in Indian REITs over time.

Earlier this year, it sold its entire stake in Mindspace Business Parks REIT (MINS.NS) in India for $235 million.

The sources added that the pricing of the block deals will be finalized early next week before the blocks are traded. The final form of block agreements and asset sales is subject to change.

ADIA ATTENTION

The initial source said ADIA will receive approximately $200 million from the sale of Blackstone’s stock and that talks are ongoing with other potential investors.

For ADIA, the investment will increase its interest in the Indian office market. As the COVID-19 pandemic subsided, many employees returned to their offices, making office space an attractive bet for investors.

Two of the sources said ADIA plans to acquire a stake in Embassy REIT through a $590 million fund it set up in June in commercial real estate with India’s Kotak Investment Advisors.

In June, ADIA said the fund would focus on “opportunities related to long-term demand for Indian office space driven by global organizations seeking to leverage the country’s skilled workforce.”

Three sources said the Embassy has appointed Morgan Stanley and Bank of America Securities to handle the process.

“Banks are doing full-blown marketing to make sure the book is well covered,” the third source with direct knowledge said.

While Bank of America declined to comment, Kotak and Morgan Stanley did not immediately respond.

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reporting by M. Sriram, Aditya Kalra and Aditi Shah; Additional reporting by Scott Murdoch in Hong Kong and Abhirup Roy in Mumbai. Edited by Jane Merriman

Our Standards: Thomson Reuters Trust Principles.

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