US private equity major Blackstone Group acquired 50% stake in a 3.7-lakh sq ft retail mall Westend Mall in Pune’s Aundh locality. With Blackstone’s entry, the project is being proposed to be significantly expanded further.
After buying retail malls in Ahmedabad, Amritsar and Navi Mumbai last year, this is the fourth acquisition by the PE giant. These acquisitions of retail malls are part of Blackstone’s strategy of building a portfolio and list them later under a Real Estate Investment Trust, said a person familiar with the development. Globally, Blackstone is the largest real estate private equity firm with $102 billion of assets under management.
Blackstone Group declined to comment for the story.
“Westend is the largest integrated mixed-use development in the micro-market of Aundh and Baner, which houses some of the top IT companies and an abundant residential catchment in the vicinity. The Westend Mall, a part of the development, is the largest operational retail mall in west Pune, with marquee brands such as H&M, Shoppers Stop, Cinepolis with IMAX, Max, Starbucks, etc. In addition to the mall, the development also houses top-notch IT companies like Convergys, Sungard, OneNetwork, etc,” said Sanjay Bajaj, Managing Director – Pune, JLL India.
International property consultancy JLL India facilitated the sale.
Westend is a multi-use commercial development with a shopping mall including retail and entertainment areas, a 250-key five star hotel, an IT park and serviced apartments, according to the developer’s website.
The project is being developed on a 17-acre land parcel – one of the largest freehold properties in Aundh, Pune. Aundh is a well-developed area of the city with easy access to the city center, IT- BT park at Hinjewadi and the Mumbai-Pune expressway.
Against the backdrop of several question marks being raised on the impact of various potential disruptive changes in the real estate sector, this deal underscores the fact that institutional investors are still wired into relevant big-ticket opportunities.
The major development in West Pune is also significant because this region has so far been under-served in terms of quality retail developments. By harnessing the demand for Grade A real estate developments in the city, Blackstone has underlined it’s got a firm finger on the pulse of the Indian growth story.
Blackstone has been lapping up properties across major markets in India in deals that are turning out to be benchmarks in the real estate sector. Blackstone owns India’s biggest portfolio of income producing office assets totalling over 30 million sq ft worth over a billion dollars across Noida, Mumbai, Pune and Bengaluru.
After building its commercial portfolio, Blackstone has now also been focusing on retail spaces in the backdrop of rising income levels and spending ability of Indian consumers. People familiar with Blackstone’s strategy say the New York-headquartered fund has a larger plan for its real estate portfolio in India, which it has built up over the past four to five years. After lapping up some key office assets across the country, it is now looking to build a retail portfolio in the country.
In late 2015, Blackstone’s real estate division agreed to buy 100% equity stake in Gurgaon-based builder Alpha G: Corp for Rs 1,600 crore. This bulked the private equity fund’s portfolio of two malls in Amritsar and Ahmedabad totalling 1.2 million sq ft, two grade A office towers on Gurgaon’s Golf Course Road spanning 200,000 sq ft and a 147 acre industrial park in Amritsar. Blackstone has also bought a 1 million-sq ft mall in Navi Mumbai’s Seawoods locality from L&T Realty for over Rs 1,400 crore.