Indiabulls to sell commercial properties to Blackstone for Rs 810 cr

Indiabulls Real Estate said on Monday it would sell its commercial properties in Mumbai and Gurugram to US-based private equity fund manager Blackstone for Rs 810 crore.

Indiabulls will sell its entire stake in Mariana Infrastructure, which owns a commercial office project in Gurugram. In Mumbai, it will sell a land parcel meant for commercial projects near its Blu property in Worli area. The property in Mumbai holds an enterprise value of Rs 675 crore. This is part of the company’s plans to exit commercial properties and become debt free, a source in the know said. As of September 30, 2017, the company had a debt of Rs 1,783 crore.

Indiabulls Real Estate has already sold its key commercial properties in Mumbai such as Indiabulls One and Indiabulls Finance Centre and properties in Chennai to Blackstone.

In June, Indiabulls Real Estate promoters sold 14 per cent stake in the company to Bengaluru-based Embassy Property Developments for Rs 950 crore as part of its strategy to exit real estate and merge with Laxmi Vilas Bank. However, the Reserve Bank of India turned down the bank merger proposal. Though Embassy had plans to buy more stake in the company, it has not done so yet.

Blackstone had been acquiring commercial properties since 2011. It spent over $6 billion on acquiring such properties. It is the largest owner of office properties and owns over 110 million sq ft of commercial properties along with its partners. Blackstone, along with partner Embassy, floated the country’s first real estate investment trust (Reit) and its another joint venture with K Raheja Corp is also gearing up for a Reit.

Blackstone owns a portfolio of nine malls in the country and may go for a separate Reit, sources said. Investment in Indian real estate sector is estimated to have increased by 9 per cent to Rs 43,780 crore during this calendar year on higher inflow from foreign funds, according to global property consultant Colliers. Office properties attracted 46 per cent of the total inflow and received nearly Rs 20,000 crore this year. 

"Investment in India’s real estate rose 8.7 per cent in 2019 compared to 2018, and touched $6.2 billion (Rs 43,780 crore)," Colliers said in a report.