US based global private equity giant Blackstone is reportedly in talks for acquiring the ILFS India Realty Fund, which is worth $525 million and is owned by the IL&FS Investment Managers Limited (IIML). IIML is a division of Infrastructure Leasing & Financial Services Limited (IL&FS).
The deal will be signed through the Indian realty division of Blackstone, which is Blackstone India Real Estate Advisors. Blackstone is a major office space owner in the country with more than 30 million sq. ft. in its portfolio across major Indian cities. ILFS India Realty Fund 1 was launched in the year 2005 as one of India’s very first funds focused on real estate. It has made 7 investments and has already exited 6 portfolios out of these investments. The major portfolios of ILFS India Realty Fund include QVC Realty Limited (investment of $100 million in the year 2008) and ETL Infrastructure Services Limited ($48 million invested in the year 2006).
Jones Lang LaSalle India is advising ILFS on selling this real estate fund as per reports. ILFS India Realty Fund II was set up in the year 2007 with a corpus of $895 million and it has already invested in 28 portfolio companies including GK Industrial Park Private Limited and Kohinoor CTNL Infrastructure Company Limited. The major portfolios held by IL&FS real estate funds include the Bangalore based Phoenix Market City, Gurugram based Ansal Esencia, Chennai based Pacifica Aurum, Bangalore based Bhartiya City and the Mumbai based Indiabulls Blu and Wadhwa Address. There is Amanora Towers in Pune as well.
IIML has six real estate funds under it currently with $2 billion under management along with commitments with an aggregate value of $1.8 billion throughout 74 transactions across the country. No official comments have been made by IL&FS and Blackstone. Blackstone had previously entered an agreement with IL&FS Milestone Fund in the year 2015 and it acquired a 74% stake owned by IL&FS in 247 Corporate Park which is located in the eastern suburbs of Mumbai. Blackstone has pumped in $3 billion across real estate projects in India across 20 transactions and has the biggest office park portfolio in the country.
Blackstone set up its real estate division in the year 2007 and hired Tuhin Parikh as the senior managing director. Parikh is an ex-chief executive at TCG Urban Infrastructure Holdings Limited, which is a pan-Indian developer and asset owner in India. Blackstone has also acquired a 50% stake in the Embassy Holding Company, which is based in Bangalore and owns 20.9 million sq. ft. across three Class-A office parks in the country. This deal took place in the year 2014. Blackstone is also on the verge of acquiring 15% in the commercial real estate business of K Raheja Corp for $250 million. Blackstone is also planning the establishment of two separate REITs for office assets along with its partners, namely the Pune-based Panchshil Realty and Bangalore-based Embassy Group.
Blackstone has also acquired a 50% stake in the Westend Mall in Pune last year along with acquiring the L&T Seawoods Mall in Navi Mumbai from L&T Realty. It also purchased AlphaOne malls in 2015 in Ahmedabad and Amritsar from the Alpha G: Corp. It is also in talks for buying the Elante mall from the Chandigarh based Carnival Group.
Blackstone LP is also setting up an Asia-dedicated realty fund which is aiming to raise a record $5 billion or even more, betting hugely on the strong returns from investments in property in the entire region as per earlier reports. This fund is likely to be launched within the next 12-16 months.
