Blackstone in talks to acquire Adani Realty’s BKC office tower for Rs 2,000 crore

May 7, 2024

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Blackstone Group is in advanced talks to buy Adani Realty’s commercial real estate project Inspire BKC, situated on the edge of Mumbai’s bustling business district Bandra-Kurla Complex (BKC), persons with direct knowledge of the development said.

The US-based private equity major is expected to shell out between Rs 1,800 crore to Rs 2,000 crore for the office tower with 800,000 sq ft space, they said.

Adani Group’s real estate development arm has been exploring monetisation of this 10-storey office tower for the last few years and held discussions with global and domestic investors including Brookfield India and Shapoorji Pallonji Investment Advisors.

Blackstone Group had also shown interest in buying out this property earlier.

Following the outbreak of Covid-19 pandemic in 2020 and uncertainty over growth in office absorption, these discussions could not move further, people cited above said.

“The commercial property market has rebounded over the last one and a half years with the resumption of work from office,” one of them said. “Adani Inspire has also witnessed several large office transactions since then and the tower is now over 90% leased, leading to revival in interest for the property.”

The office tower counts Novartis, Reliance Nippon Life Insurance, Ascendas Firstspace Development Management, and MUFG Bank among its key occupiers.

In the most recent lease transaction here, coworking office space provider Bhive Workspace picked up over 62,000 sq ft across seven offices in Inspire BKC through a long-term lease of five years.

The lease rentals for this transaction has been set at Rs 205 per sq ft a month and the agreement includes a clause to escalate the same by 15% after three years.

ET’s email query to Adani Realty remained unanswered until the time of going to press, while Blackstone declined to comment.

Net absorption in India’s top seven office markets breached the 40 million sq ft mark and stood at 41.97 million sq ft in 2023, showed recent data.

This not only marked a new post-Covid milestone but also positions it as the second highest annual absorption, trailing only the levels recorded in 2019.

Institutional investors are displaying robust confidence in the Indian office sector, propelled by its optimistic growth outlook and unwavering demand. This sentiment has ignited a significant surge in activity, as prominent global and domestic funds are swiftly closing substantial deals.

The office real estate sector’s resilience amidst economic fluctuations and its ability to adapt to evolving work dynamics have bolstered investor trust even as it underscores the industry’s potential for sustained growth in the foreseeable future.

  • Published On May 7, 2024 at 08:54 AM IST

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