Blackstone reduces stake in Embassy Office Parks REIT

28 Sep 2022 , 06:14 AM

Blackstone Group, a major player in private equity, sold approximately 8% of Embassy Office Parks REIT, India’s first Real Estate Investment Authority (REIT), through open market block sales, for $326 million or Rs2,650 crore.

Through its 12th real estate fund, which recently raised more than $590 million and has sovereign wealth fund Abu Dhabi Investment Authority (ADIA) as a prominent partner, Kotak Realty Fund has purchased units worth $200 million or Rs1,600 crore.

In the early hours of Tuesday’s trading session, deals worth $125 million in units were made by ICICI Prudential, HDFC Life Insurance, Kotak Mutual Fund, and other investors.

Through these trades, 77 million shares of Embassy Office Parks REIT were sold for a price of Rs345 each.

Kotak Investment Advisors joined together with an ADIA subsidiary earlier this year to create this $590 million, or around Rs4,600 crore, real estate investment platform.

The fund, which will have its headquarters in GIFT City in Gujarat, will invest in office properties all over India with a focus on the top six real estate markets in that country: Mumbai, Bangalore, Delhi-NCR, Pune, Hyderabad, and Chennai.

With the conclusion of its 12th real estate fund, Kotak Investment Advisors has raised, managed, or provided advisory services for more than $2.8 billion through its real estate fund series.

Since Embassy Office Parks REIT went public in April 2019, Blackstone has reduced its ownership three times.

The international private equity fund had reduced its holding in Embassy Office Parks REIT through block deals as of September 2021 as well.

The institutional investor then sold a roughly 6% share to raise $275 million. Following the deal, Blackstone’s formerly 38% ownership of the REIT was decreased to 32%.

Blackstone had $1.7 billion in exposure to Embassy Office Parks REIT before the 2021 share sale. At that time, Blackstone sold shares for Rs355.20 per unit.

With an estimated $60 billion in assets under management across numerous industries, Blackstone has emerged as the most aggressive institutional investor in India, ranking among the top 10 business organizations in the nation. Over 40 different investments total nearly $22 billion in real estate market value.

With a portfolio of 38 properties totalling almost 100 million square feet in offices across 7 cities, Blackstone is the largest office owner in India. Of this, offices totalling about 13 million square feet are being built, and 16 million square feet will be developed in the future.

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