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Indiabulls-Blackstone JV to acquire office assets in NCR

Livemint:  April 30, 2019

Kolkata:  Mumbai-based developer Indiabulls Real Estate Ltd (IBREL) and its joint venture partner, Blackstone Group Lp, are acquiring three office assets in Delhi and Gurugram, even as it is in talks to exit the real estate business, said two people familiar with the development, seeking anonymity.

Acquisition of two office properties will be completed in the June quarter, while the third one will be closed after that. All assets will be part of the joint venture portfolio. Commitments for these acquisitions, which will bring assets with annuity income under the joint venture, were made earlier, and the partners will go ahead with them, said the first person.

Last March, Blackstone had bought a 50% stake in IBREL’s office properties One Indiabulls and Indiabulls Finance Centre in central Mumbai for $730 million ( ₹4,750 crore), which helped the developer reduce its debt.

Days after Indiabulls Group chairman Sameer Gehlaut said the firm will give up the real estate business if needed, ahead of the proposed merger of Indiabulls Housing Finance Ltd with Lakhsmi Vilas Bank, the promoters initiated talks with potential buyers to exit the business. Promoters’ stake in IBREL stands at 38.8%.

The Indiabulls Group is believed to have sounded out joint venture partner Blackstone and other leading developers to offload its stake in IBREL, The Economic Times had reported last week.

“Most of IBREL’s residential projects are at an advanced stage of construction and the firm hasn’t launched anything significant recently. The commercial office portfolio is fairly large and once the acquisitions are completed, Blackstone will own a large part of the firm’s projects," said the second person.

When contacted, Blackstone and IBREL spokespersons declined to comment.

In an analyst presentation last week, IBREL said its rental portfolio is ready for a real estate investment trust, or REIT, listing, which will provide an opportunity to unlock value. In the past couple of years, IBREL has been streamlining its realty portfolio, exiting office and residential projects in markets such as Chennai, and deciding to focus primarily on Mumbai and the National Capital Region (NCR).

Last week, the developer said in order to pare debt, and, given the uncertainty around Brexit, it has decided to divest Century Ltd, the parent firm that houses the Hanover Square property in London. “In light of continuing Brexit related issues and uncertainty around it, the London property market remains sluggish. So, the promoter has undertaken to buy the parent company of London asset for £200 million," it added. The developer had purchased the property for £161.5 million in 2014.

It then launched the Hanover Bond project—a collection of 80 apartments and a five-star hotel—in March, and opened bookings for customers in 2017.

The deal is subject to approvals, including shareholders’ consent.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.