Prestige concludes phase 1 of deal with Blackstone at Rs 7,467 cr

Bengaluru-based real estate player Prestige Estates has completed phase I of its Rs 9,160-crore deal with US equity major Blackstone Group at approximately Rs 7,467 crore. 

The Prestige-Blackstone deal is one of the largest real estate deals in the country comprising the sale of 21 million square feet of assets by the Prestige Group to Blackstone. These include six completed office assets, four under construction offices, and 9 retail malls. Phase 1 of the transaction includes sale of 12 assets comprising completed retail, office and hotel assets. Phase 2 of the transaction is expected to get completed by the end of next quarter. 

“We believe that this transaction will further strengthen our foundation and help us in gearing up for the next level of growth. This transaction will also aid us in building long-term strategic partnership with Blackstone Group and leverage the respective strengths of both to create value for the stakeholders,” said Irfan Razack, Chairman, Prestige Group. 

Proceeds from the transaction will be used to repay debt, for growth and for construction of ongoing projects.

“We have a strong development pipeline of about 43 msft office and retail portfolio in key locations across cities and in the next 4-5 years it is projected to yield rentals of over Rs 3,000 crore per annum with growth close to 10x of our post deal rental portfolio of about Rs 300 crore,” he added. 

The company has 47 ongoing projects across segments, with a total developable area of 59 msft and 62 msft under planning. It also holds a land bank with a potential developable area of over 27 msft.

Blackstone is the largest office owner in the country, and has invested $10 billion in real estate alone with this transaction. It has joint ventures with Panchshil Realty, K Raheja Corp, Salarpuria Sattva, among others. 

Blackstone's two joint ventures with Embassy group and K Raheja Corp have floated real estate investment trusts or REITs in the country.