Private Equity: Blackstone to Acquire Prestige Group Assets

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$1.7bn Deal is Largest for India Real Estate Sector. 

Private equity giant Blackstone group is planning to acquire Prestige Group’s rental income assets for over $1.7 billion, or Rs 12,745 crore.  This buyout will be the largest for the real estate sector in India.  This transaction will prove to be useful to Prestige Group as they plan to become solvent and grow the company.  

Prestige Group’s rental assets include properties in Chennai, Bengaluru, and Mysore.  This transaction will also be a record for Blackstone — the largest realty investment in India.  The deal is set to finalize in the next few weeks.  Following the deal, Blackstone will have full control over 20 million square feet of commercial real estate and 16 million square feet of leased property.  This includes nine malls, hospitality assets and other assets that will double Blackstone’s real estate portfolio.  Prestige Estates Projects was up 1.7 percent, and its net debt was Rs 8,174 crore as of March.  Its 2020 rental revenue stands at Rs 1,050 crore.  The developer plans to embark on a new project for its commercial real estate portfolio which will involve a 32 million square foot space.  

Outlook

Since the advent of the Coronavirus pandemic, private equity firms like Blackstone are carefully allocating their dry powder to emerging markets like India.  Leveraged businesses are under pressure with liquidity, and emerging markets may have the advantage and higher returns for private equity.  

About Prestige Group

Prestige Group is a property development company based in South India.  It was founded in 1986 in Bangalore and has since specialized in a variety of practice areas.  This includes hospitality, rentals, retail, luxury homes, and commercial real estate.  

 

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