Indiabulls To Sell 50% In Mumbai Assets To Blackstone For Rs 4,750 Crore

Indiabulls Real Estate Ltd. has executed a definitive agreement with global private equity investor Blackstone Group to divest 50 percent stake in its prime commercial properties in Mumbai for Rs. 4,750 crore.

IBREL has executed transaction documents with the entities controlled by Blackstone to divest their entire holding in certain subsidiaries and thereby indirectly divesting 50 per cent stake in Indiabulls Properties Private Ltd. (IPPL) and Indiabulls Real Estate Company (IRECPL) at an aggregate enterprise value of around $1461.5 million or Rs 9,500 crore, the company had said in a BSE filing.

"Substantial part of sale proceeds would be utilised towards repayment of existing debts of the company and its subsidiaries, and for achieving sustainable long term growth and for further strengthening of their on-going businesses," it said. The transaction is expected to be completed by March 31.

Once this transaction is concluded, Indiabulls will cease its sole control over the two subsidiaries IPPL and IRECPL, Indiabulls added.

The company, did not give any details about the assets held by these two subsidiaries.

However, people in the know told PTI that the two subsidiaries hold premium commercial office assets, Indiabulls Finance Centre and One Indiabulls Centre, in central Mumbai.

Indiabulls in April last year had announced plans to restructure its business by creating a separate venture for commercial and leasing operations as part of efforts to focus on each segment. It planned to hive off commercial and leasing business into a separate entity Indiabulls Commercial Assets Ltd.

In a recent announcement, the company said it plans to sell its housing and commercial assets in Chennai as part of strategy to exit non-core market and restructure its business.

The U.S.-based Blackstone directly and along with its joint venture partner Embassy group currently holds huge commercial assets with over 56 million square feet across major cities. The group is planning to launch the country's first real estate investment trust to monetise commercial assets.

Unlike housing sector, the commercial real estate is doing fairly well and attracting huge investment from global investors like Blackstone and Singapore's sovereign wealth fund GIC.

In late December 2017, DLF promoters concluded sale of 40 percent stake in rental arm for nearly Rs. 12000 crore. This deal included sale of 33.34 percent stake to GIC for Rs. 9000 crore.

A few years ago, Godrej Properties had sold over 4 lakh sq ft of office space in Bandra-Kurla complex for nearly Rs 1500 crore.