9. February 2016 05:48
BENGALURU | MUMBAI: Blackstone Group, the world's biggest private equity real estate investor, is in advanced talks with Salarpuria Sattva Group to put in about Rs 450 crore in its upcoming, 30-acre commercial property in Knowledge City in Hyderabad, three people familiar with the development said.
"This would be a pure equity transaction and is expected to be concluded in the next few weeks. The fund is picking up this stake on its own and not through any of its joint ventures with Embassy Group or Panchshil Realty," said one of the people.
This will be the first real estate investment by New York-based Blackstone in 2016 after being one of the most active buyers of office property across India last year. This will be one of the few under-construction properties that Blackstone is investing in - the fund has mostly picked up ready and income-producing office real estate projects. Blackstone declined to comment for this story. "Blackstone, as a matter of policy, does not comment on market speculation," the fund said in an email response to ET's query. Mahesh Khaitan, director of Bengaluru-based Salarpuria Sattva, declined to comment.
Knowledge City in Hyderabad is spread over 200 acres of land that was sold to some 13 companies for Rs 2,000 crore by the Andhra Pradesh government in 2008. Salarpuria Sattva bought 30 acres in the project for over Rs 400 crore. The proposed Salarpuria project is estimated to have total saleable office space of 6.5 million square feet, which will be developed in phases over the next five years. Swiss pharmaceutical company Novartis picked up 1.15 million sq. ft. of space in this project last year to consolidate and expand its operations in Hyderabad.
Blackstone concluded some of the major office property transactions in 2015. Among them was its buyout of Gurgaon-based builder Alpha G: Corp for Rs 1,600 crore, the first full acquisition of a real estate company in India. Blackstone also acquired 247 Park at an enterprise value of Rs 1,050 crore and paved way for the exit of investors Milestone Capital and listed construction firm HCC.
Private equity real estate companies deployed over $5 billion in Indian real estate companies and projects in 2015 - the highest since the financial crisis of 2008. These firms made 90 investments in India last year, of which 85 transactions had an announced value of $5.06 billion, according to research from Venture Intelligence.Investment values surged from $2.2 billion in 2014, when there were 75 transactions. Demand in India's commercial property market in the top seven cities has risen, with deals covering a record 38 million sq. ft. in 2015.