Blackstone Group Nearing Acquisition of Adani Realty’s Inspire BKC Tower for Rs 2,000 Crore
In a significant development in the commercial real estate sector, the Blackstone Group is in the final stages of acquiring Adani Realty's Inspire BKC tower located in Mumbai's prestigious Bandra-Kurla Complex (BKC). Sources with direct knowledge of the matter revealed that the deal is poised at an estimated value of Rs 1,800-2,000 crore for the expansive 800,000 square feet tower, which houses several prominent corporate entities.
The US-based private equity giant has been engaged in advanced negotiations to procure Adani Realty’s commercial property project, strategically positioned on the periphery of Mumbai’s bustling business hub, the Bandra-Kurla Complex. According to insiders, the transaction is anticipated to range between Rs 1,800 crore to Rs 2,000 crore for the sprawling office tower spanning 800,000 square feet.
Adani Group’s real estate arm has been deliberating on the monetization of this prized asset for the past few years, exploring discussions with both domestic and international investors, including Brookfield India and Shapoorji Pallonji Investment Advisors. Prior to this, Blackstone Group had also expressed interest in acquiring the property. However, due to the onset of the Covid-19 pandemic in 2020 and uncertainties surrounding office space absorption, these discussions were temporarily halted.
Recent trends indicate a resurgence in the commercial property market, attributed to the gradual return to office work. Sources suggest that Adani Inspire has experienced a surge in leasing activities, with the tower currently boasting an occupancy rate exceeding 90%. Notable tenants of the office tower include Novartis, Reliance Nippon Life Insurance, Ascendas Firstspace Development Management, and MUFG Bank.
In the latest lease transaction, Bhive Workspace, a coworking office space provider, secured over 62,000 square feet across seven offices in Inspire BKC through a long-term lease agreement spanning five years. The lease rentals for this transaction have been set at Rs 205 per square foot per month, with provisions for a 15% escalation after three years.
Despite attempts to seek clarification, Adani Realty remained unresponsive to queries, while Blackstone declined to comment on the matter.
The Indian office market has witnessed a notable uptick in net absorption, surpassing 40 million square feet and reaching 41.97 million square feet in 2023, as per recent data. This surge not only signifies a significant milestone post the Covid-19 era but also positions it as the second-highest annual absorption, trailing only behind the levels recorded in 2019.
Institutional investors are demonstrating robust confidence in the Indian office sector, buoyed by its optimistic growth prospects and sustained demand. This confidence has translated into a flurry of activity, with prominent global and domestic funds swiftly finalizing substantial deals. The resilience displayed by the office real estate sector amidst economic uncertainties, coupled with its adaptability to evolving work dynamics, continues to instill investor confidence, reaffirming its potential for sustained growth in the foreseeable future
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