Prestige Estates looks to pare debt, raise liquidity via Blackstone deal

Bengaluru-based realtor has over 30 mn sq ft of offices and over five mn sq ft of malls under various stages of development

Prestige Estates is planning to build twice the amount of commercial property space it is looking to sell to global fund manager Blackstone. The deal, sources said would help it generate liquidity.

News reports had suggested that Blackstone is looking to acquire 20 million sq ft of commercial space, including 16 million sq ft of ready and completely leased assets.

“They are selling the assets to reduce debt and generate liquidity, given current environment. New growth will continue irrespective of that,” said the source, adding that the company might tie up with PE funds in the future as well.

Bengaluru-based Prestige has over 30 million sq ft of new offices and over 5 million sq ft of new malls that are in various stages of development, said a source in the know. These projects are located in Delhi, Bengaluru, Pune, Hyderabad, Chennai, among others. 

“They are selling the assets to reduce debt and generate liquidity, given current environment. New growth will continue irrespective of that,” said the source, adding that the company might tie up with PE funds in the future as well.

A mail sent to Prestige did not elicit any response.

The same source quoted earlier said that Blackstone is looking at lucrative exit opportunities in the future through real estate investment trust, besides steady income and capital appreciation from the assets. Prestige had sold stakes in its malls to Singapore-based CapitaLand, which it later bought out for Rs 342 crore. While the company has 37 ongoing residential projects, comprising around 43.97 million sq ft, there are 23 upcoming projects totalling 30.31 million sq ft at locations including Bengaluru, Hyderabad, and Chennai. It has put launches on hold till August because of Covid-19-led interruptions.

The firm reported a 64 per cent fall in its consolidated net profit, which stood at Rs 51.1 crore for the quarter ended March 31. Its net profit was Rs 141.9 crore in the year-ago period. Analysts say the company is likely to post losses in Q1FY21 on account of interest expense or depreciation.

“Being one of the oldest and largest developers in south India, they have many good land parcels which they can develop. The company has bright prospects,” said Ashok Kumar, managing director at Gennex Patners.