Sovereign wealth funds including Singapore’s GIC and Abu Dhabi Investment Authority (ADIA) along with two Canada-based pension funds are in talks to acquire Blackstone Group’s 50% stake in two separate commercial portfolios of Panchshil Realty and Salarpuria Sattva Group, said persons with direct knowledge of the development.
The deal is estimated to be concluded at an enterprise valuation of over $4.5-$5.0 billion.
The Canada Pension Plan Investment Board (CPP Investments) and The Ontario Municipal Employees Retirement System (OMERS) are the pension funds that have evinced interest in picking up the stake in this commercial real estate portfolio spread across a total 26 million sq ft in India.
The portfolio includes operational assets spanning 21 million sq ft in two key commercial property markets of Pune and Hyderabad. In addition to office properties, the portfolio also comprises a 415-key JW Marriot hotel and Pavilion Mall in Pune.
“Even after selling stake in this portfolio, the US-based private equity major will continue to hold other assets jointly with Panchshil Realty and Salarpuria Sattva Group that are among the early partners of Blackstone Group in India,” said one of the persons mentioned above.
The global investment major entered into a joint venture with Pune-based Panchshil Realty in 2014. It currently holds key assets including Eon Free Zone, Tech Park One, Panchshil Business Park and ICC Tech Park in Pune along with the partner.
Blackstone formed an alliance with Salarpuria Sattva Group in 2017 and has been holding prime assets such as Knowledge City, Knowledge Capital, Image Towers and Knowledge Park along with the Hyderabad-based developer.
ADIA and Blackstone declined to comment for the story, while ET’s separate email queries to GIC, CPP Investments, OMERS, Panchshil Realty, and Salarpuria Sattva Group remained unanswered until the time of going to press.
Indian real estate has attracted nearly $32.5 billion private equity investments across 216 transactions over the last six years including both debt and equity deals. The office real estate has been leading with over $17 billion of this investment across 75 deals concluded in this segment alone, showed Knight Frank India data.
Against the backdrop of an ongoing policy overhaul, rising investor confidence, enhanced transparency, and sustained growth in demand for grade A commercial office space, experts believe the investment momentum in the Indian real estate sector will continue to rise.
For commercial real estate in India, the introduction of Real Estate Investment Trusts (REITs) has proved to be a key gamechanger. While the first REIT was listed on Indian bourses in 2019, currently there are a total four listed REITs in the country.
