US-based private equity major Blackstone Group is stepping up efforts to spread its retail real estate assets footprint across the country and is currently in talks to acquire three retails malls, said two persons familiar with the development.
These proposed acquisitions spread over around 2 million sq ft will push Blackstone’s retail portfolio from 5.1 million sq ft to over 7 million sq ft, making it the largest retail mall operator in India.
“To support the next level of growth in the retail portfolio, Blackstone is eyeing opportunities in both tier-I and -II cities. The sizes of these assets vary from 2 lakh sq ft to 1 million sq ft, depending on the location that makes them commercially viable,” said one of the persons mentioned above.
Blackstone, through its retail subsidiary Nexus Malls, has charted out an aggressive plan to expand its current portfolio of eight retail malls acquired over the past two years. The private equity major is already the largest investor in the commercial real estate in India with over 56 million sq ft portfolio and is now looking to take control of more retail real estate assets.
Blackstone has recently roped in the former managing director of Godrej Consumer Products and Hindustan Unilever’s executive director — New Ventures, Dalip Sehgal as CEO at Nexus Malls, to help its strategy to grow retail assets portfolio.
Blackstone’s current portfolio of retail assets includes 1.15-million-sq-ft Elante Mall in Chandigarh, nearly 1-million-sq-ft Seawoods Grand Central Mall in Navi Mumbai and two assets each in Indore and Pune. In November 2015, it had also acquired two malls in Amritsar and Ahmedabad from Alpha G Corp.
Over the past few years, Blackstone has emerged as the most aggressive institutional investor in India’s real estate sector, picking up properties across major cities in deals that are turning out to be benchmarks in the sector. The company owns India’s biggest portfolio of income-producing office assets, totaling over 31million sq ft across key property markets of Noida, Mumbai, Pune, and Bengaluru.
In its real estate portfolio, Blackstone has over 27 investments that own 56million sq ft across 28 operating office and non-office assets. Of its total $4.1 billion real estate investments, it has invested $2.8 billion in office real estate assets, while $1.3 billion has gone towards non-office real estate assets. It also has 19.2 million sq ft of commercial realty space under development across the country.
With an aim to creating a portfolio of assets as the Indian market expands, some of the leading global private equity and sovereign funds, including Blackstone Group, Canada Pension Plan Investment Board (CPPIB), APG Asset Management, Xander Group and GIC have started investing in retail real estate, and this trend is expected to strengthen further.
Source: Reality-Economics Times