Blackstone Exits Embassy REIT, Sells 23.5% Stake for Rs 7,100 Crore

New Delhi, Dec 20 (PTI) Global investment firm Blackstone on Wednesday sold its entire 23.5 per cent stake in Embassy Office Parks REIT for around Rs 7,100 crore to various foreign and domestic investors, including Capital Group, ICICI Prudential MF and SBI Mutual Fund, sources said.

Embassy Office Parks REIT is India's first Real Estate Investment Trust (REIT), sponsored by Blackstone and Bengaluru-based realty firm Embassy Group.

Blackstone sold its entire stake or nearly 22.36 crore units in the entity at around Rs 316 per share through open market transactions. At this price, the deal is valued at about Rs 7,100 crore, the sources said.

The units were sold at a discount compared to the REIT's closing price of Rs 332.11 apiece on the BSE, which is a decline of 1 per cent as against Tuesday's closing level.

According to bulk data available on the BSE, around 19 crore units of the REIT were sold at an average price of Rs 316 apiece to multiple investors, including SBI Mutual Fund (MF), ICICI Prudential MF, HDFC MF, Fidelity Funds South East Asia Fund, Capital Group and APAC Company XXIII.

The sources said some of the existing unit holders, including ADIA, participated in the bulk deal. SBI Mutual Fund was among the new investors, they added.

Details about the transactions related to more than 3 crore units could not be immediately ascertained.

Embassy REIT was listed on stock exchanges in 2019 after raising around Rs 5,000 crore through a public issue.

Embassy Group has around 8 per cent stake in Embassy Office Parks REIT.

"We welcome the expansion of the REIT's public float register to include more high-quality investors," Embassy Group CMD Jitu Virwani said.

"We believe that this transaction underscores the success of REITs in India and demonstrates how the world's leading investors view the criticality of well-run, high-quality REITs such as Embassy REIT in their portfolios," he added.

The REIT's investor base includes domestic mutual funds, insurers and foreign institutional investors, including sovereign wealth funds.

"The business is in great shape, as demonstrated by its recent strong performance, in which the REIT delivered one of its highest leasing achievements to date in the first half of this fiscal," Virwani said.

He also said the widespread distribution of unit holders adds depth and liquidity to the REIT's units, providing more efficient price discovery and bolstering the governance.

"Embassy REIT is an independent listed entity run by a professional management team. The REIT is strategic to Embassy Group, and we remain committed to its growth and development," he added.

Embassy REIT CEO Aravind Maiya said the entity's public shareholding continues to go up and has increased from 30 per cent at IPO to 92 per cent now. "We paved the way for REITs in India and the increased investor participation is heartening".

Blackstone has sold its stake in many tranches. It had 55 per cent in Embassy REIT at the IPO stage.

In June 2020, Blackstone diluted 8 per cent stake for USD 355 million. Then in December 2020, there was a sale of Embassy Tech Village which diluted Blackstone's stake to 38 per cent.

In September 2021, it had sold a 6 per cent for USD 275 million. In September 2022, the global investment company sold an 8 per cent for USD 326 million.

Embassy REIT owns and operates a 45.3 million square feet portfolio of nine infrastructure-like office parks and four city centre office buildings in Bengaluru, Mumbai, Pune, and the National Capital Region (NCR).

Embassy REIT's portfolio comprises 35.3 million square feet of completed operating area.

Blackstone launched two office REITs in India -- Embassy REIT and Mindspace REIT. It has already exited Mindspace REIT.

Also, it has sponsored retail assets-backed REIT 'Nexus Select Trust' which got listed this year.

Blackstone continues to be one of the largest commercial office landlords in India with 70 million square feet. Apart from this, it owns 40 million square feet of Warehousing and 12 million square feet of retail space. The company is also building two data centres in Navi Mumbai.

On Wednesday, units of Embassy Office Parks REIT fell 1.02 per cent to settle at Rs 332.11 per piece on the BSE, while it slipped 1.37 per cent to close at Rs 331.15 apiece on the NSE.