CapitaLand to acquire IT parks of Blackstone in Pune for Rs 22 billion

Blackstone is selling its BlueRidge SEZ and another SEZ at Hinjewadi in Pune

CapitaLand, one of the largest real estate companies in Asia, is set to acquire the IT parks of the US-based private equity firm Blackstone in Pune.

According to a source, the deal is estimated to be around Rs 22 billion. Blackstone is selling its BlueRidge special economic zone (SEZ) and another SEZ at Hinjewadi in Pune. “The deal is in its final stages and documentation is on,” said the source. Another global investor Xander was also in the race to buy the assets but CapitaLand seems to be the front runner, the source added.

CapitaLand owns a portfolio of $67 billion as of December 31, 2017, comprising integrated developments, shopping malls, serviced residences, offices, homes, real estate investment trusts (Reits), and funds. It owns serviced apartments and malls in the country.

B V Bharadwaja, group country head (India), CapitaLand International, said, “We are constantly on the look out for opportunities to expand our presence in India and will not comment on market speculation.”

Blackstone hired investment-banking division of Morgan Stanley to sell the properties. Blackstone bought the 1.5 million-sqft SEZ from fund manager IDFC Alternatives in 2014 and bought another SEZ from DLF and Hubtown for Rs 8.10 billion in 2011. A spokesperson of Blackstone, however, declined to comment.

In January, CapitaLand sold its stake in six malls in the country to Bengaluru-based developer Prestige group for Rs 3.24 billion. The malls are in Bengaluru, Mysore, Mangalore, Hyderabad, Kochi, and Udaipur. Shobhit Agarwal, managing director and chief executive officer, ANB Capital Advisors, said Indian real estate had seen considerable improvements in the past few years through various policy-level changes. 

“The transparency has definitely increased. This has infused higher level of certainty among foreign institutional investors who were either sitting on the fence or were not keen to consider India as an investment destination,” Agarwal said. 

Indian office market is still attractive with less than a dollar rental per square feet providing good entry points for the dollar money,” Agarwal said.

While investors such as Blackstone and Brookfield had already aggregated sizable grade-A office assets portfolio, others were actively looking at creating their own portfolio, which they could monetise through REIT, Agarwal added.