Blackstone sells 8.7% stake in Embassy Office Parks REIT for $300 million

MUMBAI: The Blackstone Group raised over $300 million (Rs 2,270 crore) by selling an 8.7% stake in Embassy Office Parks REIT through block deals.

About 14 investors including domestic and global funds such as CI Investments, Capital Group and Nomura Asset Management picked up the US private equity firm’s stake in India’s maiden and only listed REIT. Some investors increased their stake in the REIT through the deals on Wednesday. A Canadian hedge fund is also among the new entities that bought the stake.

“The deal was upsized given the demand for units worth $500 million. The fund earlier planned to raise about $250 million through this transaction,” said one person familiar with the development.

The transaction took place at Rs 341 per unit, while the scrip was at Rs 356.27 at the end of the trading session.

“We continue to be big believers in India and its potential. We have significant confidence in the office sector and Embassy REIT, given growing demand from domestic and global companies for Indian talent, particularly in technology hubs like Bangalore,” said Jonathan Gray, chief operating officer, Blackstone. “This transaction helps diversify institutional ownership and improve liquidity. We remain the largest shareholder of Embassy REIT and are quite optimistic about its future.”

In April 2019, the REIT had raised Rs 4,750 crore through an IPO and listed its units at Rs 300.

“The reported transaction significantly increases Embassy REIT’s public float, enhances liquidity and diversifies our investor base. The participation from global investors demonstrates the continuing appeal of the REIT product to existing and new investors as well as the strength and resilience of our business,” said an Embassy REIT spokesperson.

Following the partial stake sale, Blackstone will hold a 46.3% stake in Embassy Office Parks REIT. The proceeds of the transaction will be used to return money to participants in Blackstone’s close-ended fund that had invested in the REIT.

Blackstone is the largest landlord in India and has deployed over $8 billion in the country’s commercial real estate.