Blackstone, one of the leading global private equity and investment firm, is set to amass a huge profit from its Joint Venture in Bangalore.
Blackstone has, joining hands with Bangalore– centered real estate firm Embassy Property Developments, planned to develop a luxury-oriented residential project. The Blackstone- Embassy group will jointly develop 467 housing units; each unit priced between Rs.3 to Rs. 10 Cr, in the project.
Blackstone expects to gain around Rs.210 Cr from their JV. This is their first big investment in Indian real estate market. In 2011 the global private equity major invested in Embassy Lakeside Terraces which is an ultra-luxury villa project. From their investment in the project, Blackstone is expected to gain around Rs.210 Cr which represents around 28% of the absolute profit.
Their return within 18 months after the investment, witnessed a growth rate of 40% per year. Embassy Lakeside Terraces, located at Hebbal, is just half-an-hour drive away from the Bangalore International Airport. Further the project provides close connectivity to the City Center With all these factors playing key roles, the project is sold robustly; enabling the investors gaining a huge amount of profit.
The American firm has invested nearly $1 billion in the real estate market of India. Blackstone has bought 16 million sq. ft. of commercial area that has been given on lease, and another 9 million sq. ft. of residential area. Further the firm had undertaken the Merrill Lynch’s realty investments as well.
Bangalore real estate market is considered as more stable than the other metro- cities like Delhi or Mumbai. Property prices in the Southern Metro City have; providing consistency, been stable and steady in the city. There is a recovery in the sales of housing units.
It is believed that Embassy Group has showed readiness and willingness to buy back the non-convertible debentures (NCDs) of the leading private equity investor firm. However both; Mr. Jitu Virwani, CMD of Embassy Group and Blackstone official refused to comment on the development.