Blackstone Group, through funds managed by Blackstone Real Estate, is acquiring Embassy Industrial Parks from Warburg Pincus and Embassy Group for Rs 5,250 crore ($717 million), the company said in a statement.
In the first tranche of the deal, it has acquired Warburg Pincus’ stake for roughly Rs 2,000 crore.
In total, the investment firm will take over 22 million square feet (sq ft) of assets via the deal.
The deal will take the India warehousing portfolio of Blackstone to roughly 40 million sq ft. It will have 15 million sq ft of operational portfolio, 15 million sq ft under-construction and the rest will be developed.
The development comes after VCCircle reported last month that the New York-headquartered Blackstone is all set to sign the deal.
Blackstone, which already has exposure to office, retail and logistics segments in the country, will add more muscle to its warehousing portfolio through the deal. It forayed into the segment early last year by teaming up with Mumbai-based Hiranandani Group to forge a platform focused on the segment.
After that, Blackstone acquired a part of Allcargo Logistics’ warehousing business.
Interestingly, Blackstone, which has partnered with Embassy Group across asset classes and platforms, came to the negotiating table after the developer’s conversations with ESR India and IndoSpace failed last year.
Embassy Industrial Parks’ warehouses are located in Bengaluru, Delhi-NCR, Hyderabad, and Pune, and are leased to e-commerce and retail players.
“Logistics is one of the firm’s highest global conviction themes, anchored by our belief that e-commerce trends will further fuel demand for the logistics space especially near city centres. This is particularly true in India, where e-commerce is in its nascent stage of development has tremendous opportunities driven by positive trends in urbanisation, domestic consumption, and emerging retail sector, which remains heavily underpenetrated compared to major economies around the world,” said Asheesh Mohta, head of Blackstone’s Real Estate India Acquisitions.
Logistics is one of Blackstone’s core investment themes globally. Since 2010, Blackstone has acquired more than 1.2 billion square feet of logistics.
“We are committed to growing our presence in India. For the past 16 years, we’ve been partnering with local developers and governments to transform assets and businesses, and help communities prosper. We’ve successfully launched the country’s first two REITs (real estate investment trusts), with the very first Embassy Office Parks REIT marking its second-year anniversary this month, and recently announced the acquisition of a portfolio of commercial properties,” said Tuhin Parikh, head of Real Estate India, Blackstone.
“The partnership with Warburg Pincus has been extremely valuable to us and they will remain our trusted partners. This transaction between Embassy Group and Blackstone further strengthens and reinforces our partnership,” said Jitu Virwani, chairman and managing director of Embassy Group.
