Realty firm Prestige Estates Projects Ltd on Monday said it has agreed to sell a large portfolio of office, retail and hotel properties to global investment firm Blackstone for an enterprise value of Rs 9,160 crore. Bengaluru-based Prestige has signed term sheets on Monday with the Blackstone group, and the deal is likely to be closed next month.
In October, Prestige Estates signed a non-binding letter of intent with Blackstone group entities for the sale of certain direct and indirect interest in certain commercial offices, retail and hotel properties, mall management and identified maintenance business. In a regulatory filing, Prestige said the company on Monday executed a term sheet with Blackstone entities.
”The consideration will be based on the enterprise value of about Rs 91,60,00,00,000,” it said. According to sources, Prestige group promoters have sold solar park separately for around Rs 800-900 crore, taking the total deal size to around Rs 10,000 crore.
In the regulatory filing, the Prestige group has given the list of assets to be sold under this deal. This includes sale of up to 100 percent stake in six entities holding completed office assets and 85-87 percent stake in nine entities owning nine malls. Up to 50 percent of the rights and interest in four entities owning under-construction office assets will also be sold.
That apart, Prestige will sell up to 85 percent in its hotel Oakwood Residences and up to 100 percent in hotel Aloft. The sources said the total asset portfolio being acquired by Blackstone is around 21 million sq ft, including completed and under-construction commercial projects.
Earlier, market sources pegged the deal size at around Rs 12,000 crore. The sources said the Prestige group has decided not to sell three-four assets because of valuation issues. It is also keeping small stakes in malls and hotels included in the deal.
The deal is expected to be closed in early December after all the necessary approvals including that of the Competition Commission of India (CCI), they said. According to the filing, the closure of the proposed deal is subject to completion of due diligence, negotiation and execution of asset-specific definitive documents, satisfaction of the conditions precedent in such asset-specific definitive documents and receipt of all necessary approvals.
The deal will be completed through a combination of primary investments, secondary investments, business transfers, asset transfers, joint ventures, demergers and slump sales. The Prestige group will utilise the fund raised through this monetisation to partly retire its debt and future expansion.
US-based Blackstone has invested around USD 8 billion in Indian real estate. It has sponsored two REIT (real estate investment trust) launched and listed so far in India — Embassy Office Parks REIT and Mindspace Business Park REIT.
