Bengaluru-based developer Embassy group, which has joint ventures with Blackstone and Warbug Pincus, has deferred it’s plans to sell a 30 per cent stake in its office holding company, said a source in the know.
The company was expecting to raise about Rs 5,000 crore through this and was looking to utilise the fund to expand its business, said the source on condition anonymity. “They feel investment climate is not right to raise new funds. They have raised most of the funds through lease rent discounting, bank debt and so on,” the source said, adding that the company was looking to float a real estate investment trust with Blackstone soon and was also looking to raise Rs 4,000 crore through this route.
The Embassy-Blackstone JV is looking to file its intent papers with capital markets regulator Sebi next month. When contacted, Embassy did not offer any comment on the matter. In fact, Embassy planned to move all the office parks owned by the group into a separate vertical which was not to include JV assets. Embassy group has over 30 million sq ft of office properties, and is one of the biggest owners of office space.
Office portfolio contributes 80 per cent to the company’s overall revenue. The company plans to use the money for future projects and expand the office business. Embassy has delivered 28 million sq ft of commercial properties.
In 2012, Embassy Group and Blackstone entered into a joint venture to form Embassy Office Parks, which has assets such Embassy Golf Links, Embassy Manyata Business Park, Embassy TechVillage and Embassy TechZone. Besides Embassy, companies such as DLF, K Raheja Corp, Prestige are selling stake in their rental arms and expected to raise over $3 billion from investors.
While Warbug Pincus and Temasek are in talks with K Raheja Corp, investors such as GIC, Blackstone are in talks to buy DLF promoter’s stake in its rental arm.
Credits Business Standard