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Blackstone Set for Big Profit in Bangalore Real Estate JV

Global investor Blackstone is set for a possible maiden profit from the Indian real estate market, riding on robust luxury apartment sales in the tech city of Bangalore. Blackstone is exiting a joint venture with southern developer Embassy Property Developments, building 467 residential units, raking in more than Rs 210 crore, said people familiar with the matter.

It represents about 28% absolute profit and an annualized return on investment topping 40% in just 18 months, the sources added. In 2011, Blackstone funded Embassy Lakeside Terraces, developing apartments priced between Rs 3 core and Rs 10 crore, at Hebbal, located 30 minutes away from the Bangalore international airport and the city centre. Blackstone aggressively struck real estate investments, including buyouts of technology parks, investing about $1 billion in the past two years. This has given the American investor a portfolio of 16 million sqft of tenanted commercial and 9 million sqft of residential space in India. It also took over Merrill Lynch’s real estate investments augmenting the residential portfolio.

Embassy Lake Terraces is among 1,000-odd luxury residences, priced upwards of $1 million, in Bangalore. The southern metro, with steady home prices, has seen sales recover faster than the bigger cities like Mumbai.

Embassy CMD Jitu Virwani has proposed to buy back Blackstone’s non-convertible debentures (NCDs), triggering a profitable exit for the world’s leading private equity investor. Virwani declined to comment, while queries to Blackstone remained unanswered.

The deal could be struck within the next two weeks, even as Embassy sold more than 300 luxury residences just six months after bookings began.

Via : TOI


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