Blackstone puts off plans to buy Coimbatore Brookefields mall

Global private equity giant Blackstone has deferred its plans to buy an 800,000 sq ft operational mall in Coimbatore in Tamil Nadu, according to sources in the know. 

“Blackstone has some issues with land rights of the mall owners in this particular mall,” said the sources. Blackstone and Brookefields Estates, the owner of the mall, had signed the term sheet and the deal, valued at Rs 450 crore, was in the final stages of the negotiations. 

“Blackstone is still trying to negotiate but as of now it is on hold,” sources added. 

When contacted, a Blackstone spokesperson said: “As a matter policy, Blackstone does not comment on media/market speculations.” 

An email questionnaire sent to Brookefields did not elicit any response. If the deal went through, it would have been the fourth mall bought by Blackstone.  Blackstone’s new mall company, Nexus Malls, owns three malls in Ahmedabad, Amritsar and Mumbai. These three malls have a total area of 3 million sq ft. It is looking to buy operational malls as well as land parcels, which it would develop with land owners. 

Last year, Blackstone acquired AlphaOne, which has malls in Ahmedabad and Amritsar.  This year, Blackstone bought a one million-sq ft mall in the Seawoods area in Mumbai from L&T Realty for about Rs 1,400 crore. According to sources, its mall portfolio is valued at Rs 1,800 crore.  

Blackstone, sources said, has set up a separate team for malls, headed by Vikram Garg, who was earlier with Religare. They have also set up a separate office in Vashi in Navi Mumbai. About 75 people work in the malls and offices of Nexus Malls. 

Globally, Blackstone has $101 billion worth of assets in real estate and owns 180 million sq ft of retail assets. 

They own Multi Corporation in Europe, which owns or manages 161 shopping centres, factory outlets and retail parks on the continent. 

Many mall developers are looking to float partnership with private equity funds. While Mumbai-based Oberoi Realty is in talks with Morgan Stanley and others to float a Rs 1,000-crore platform, Ruia-owned Phoenix Mills is talking to Canada’s Canada Pension Plan Investment Board (CPPIB) to buy land and develop malls. 

Despite dozen-odd malls shutting down last year, property developers such as Lodha, Oberoi, and Phoenix Mills are again looking to build new malls. As much as 7.9 million sq ft of new mall space is expected to be added this year, which is almost double from last year, real estate consultant JLL said in a presentation recently.