Prestige to sell rental assets to Blackstone for $1.6 bn

The deal, which includes 14 million sq ft of completed assets and another 10 million sq ft of under-construction assets, is one of the biggest real estate portfolio acquisitions in the country.

“The deal includes Prestige commercial office and retail assets. Prestige will use the capital to mainly reduce debt and also for business development,” the person said.

The office assets that Blackstone will acquire from Prestige will be a part of the former’s Nucleus Office Parks, an entity that house its commercial office assets with rental income, to consolidate all its fully-owned properties under a single entity.

Nucleus Office Parks is the commercial office equivalent of Blackstone’s subsidiary Nexus Malls that houses its shopping malls in India.

A Blackstone spokesperson and executives of Prestige didn’t comment to queries.

Blackstone is the largest office owner in India with a portfolio of 118 million sq. ft across 44 assets in six cities. Since its foray into the country, the company has invested over $15 billion across sectors such as real estate ($7.8 billion), private equity ($6.9 billion) and tactical opportunities ($400 million).

In September, anti-trust watchdog Competition Commission of India (CCI) approved Canada’s Brookfield Asset Management’s acquisition of another Bengaluru-based realty firm RMZ’s commercial assets portfolio along with its co-working business CoWrks.

The value of the acquisition is pegged at around ₹15,500 crore.

Brookfield has also filed a draft offer document with market regulator SEBI to raise around ₹4400 crore through a real estate investment trust (REIT). The IPO could be launched this year-end or by early 2021 latest.

This would be the third REIT in India, after Mindspace Business Parks REIT which debuted on the stock exchange in August and Embassy Business Office Parks that launched last year.