BlackStone Group buys office space of Rs.2000 crore in Adani's BKC Office Tower

Real estate giant Blackstone Group is in talks with Adani Realty regarding their purchase of Adani’s commercial real estate project in BKC, located on the outskirts of Mumbai's bustling business hub Bandra-Kurla Complex (BKC). The deal between the dark horses of Indian Real estate market is in advanced stage, and according to sources, US-based private equity firm is entitled to pay between Rs.1,800 Crore and Rs.2,000 Crore for the office skyscraper.

The commercial real estate is expanded over an area of 800,000 square feet. From the past couple of years Adani Group’s real estate arm has been looking for a way to monetize this 10-story office tower. They already had conversations with global and domestic investors such as Brookfield India and Shapoorji Pallonji Investment Advisors. 

Blackstone Group had previously expressed interest in buying out this property. Unfortunately, after the advent of Covid-19 epidemic in 2020 and concern about growth in office absorption, these conversations were unable to reach further.

According to the media report, the commercial property sector has experienced a recovery in the past eighteen months due to the return to office work. The real estate arm of Adani Group, has seen numerous significant office deals during this time, resulting in over 90% occupancy of the tower and reigniting interest in the property.

The primary tenants of the modern office complex include, Novartis, Reliance Nippon Life Insurance, Ascendas Firstspace Development Management, and MUFG Bank. In a recent acquiring deal, coworking office space provider Bhive Workspace has acquired roughly 62,000 square feet across seven offices in Inspire BKC on a five-year contract. The term of lease includes a monthly rental rate of Rs. 205 per square foot, with a 15% escalation clause after three years.

Previously, Blackstone a signed an acquiring deal of 650,000 square feet of space in the One BKC building within Mumbai's Bandra-Kurla Complex for Rs. 2,600 crore. This year, Blackstone Group has planned to add $25 billion worth of Indian private equity assets over the next five years.  Moreover, Blackstone aims to invest in export-oriented industries and electronic manufacturing, which represents emerging sectors within the Indian economy.