Blackstone to sell $400 million stake in Embassy REIT through block deals next week

US-based private equity major Blackstone Group is planning to raise around $400 million by selling part of its stake in India’s maiden Real Estate Investment Trust, Embassy Office Parks REIT, by the middle of next week, said people familiar with the development.

The stake sale will be executed through block deals on stock exchanges.

The exact quantum of the proposed stake sale, the third so far since the REIT’s listing in April 2019, has not been decided as yet and depends on the unit price of the REIT on the day of execution of the block deals.

On Friday, Embassy Office Parks REIT units closed at Rs 354.67 on the BSE.

Abu Dhabi Investment Authority (ADIA), the sovereign fund of Abu Dhabi, is believed to be participating in these block deals and picking up a stake worth $200 million in the REIT.

“The proceeds of this transaction are likely to be used to return money to participants in Blackstone’s close-ended fund that had invested in the REIT,” one of the persons mentioned above told ET.

Blackstone and ADIA could not be reached immediately for a comment. Reuters reported the story on Friday evening.

In September 2021 too, the global private equity major trimmed its stake in Embassy Office Parks REIT through block deals in the open market.

The institutional investor then raised $275 million by selling around 6% stake in the listed entity. The transactions reduced Blackstone’s stake in the REIT to 32%, from 38% previously.

Prior to the 2021 stake sale, Blackstone had $1.7 billion worth of exposure in Embassy Office Parks REIT.

Blackstone had then sold around 57 million shares of Embassy Office Parks REIT at Rs 355.2 per unit.

Institutional investors and funds, including BNP Paribas Arbitrage, American Funds Global Balanced Fund, Stichting Depositary APG Tactical Real Estate Pool, and Integrated Core Strategies (Asia), were among the key entities that had bought these REIT units in block trades.

Co-sponsored by the Blackstone Group and Embassy Group, Embassy Office Parks REIT is India’s first REIT that listed in April 2019.

This will be the third time Blackstone will be trimming its exposure to the REIT through open market block deals.

In June 2020, it had raised over $300 million by selling an 8.7% stake in the listed entity.

In December 2020, Blackstone and Embassy sold Embassy TechVillage, an integrated office park in Bangalore, to Embassy Office Parks REIT. Apart from this, a fundraising exercise by the REIT through a Qualified Institutional Placement (QIP) at that time had lowered Blackstone’s holding in the REIT to 38% from over 46%.

Embassy REIT owns and operates a 42.4 million sq ft portfolio of eight infrastructure-like office parks and four citycentre office buildings in India’s key office markets of Bangalore, Mumbai, Pune, and the National Capital Region. Its portfolio comprises 32.3 million sq ft completed operating area and counts over 190 global companies as occupiers.

Blackstone is the largest office, retail and warehousing landlord in India and has deployed over $11 billion in the country’s commercial real estate so far.