BENGALURU: Prestige Estates is in talks with the US-based private equity firm Blackstone to sell a big portion of its commercial office portfolio and some malls for at least $1.5 billion as part of efforts to reduce debt, multiple people familiar with the matter said.
The deal, if concluded, would be one of the biggest this year in the real estate space, which has been struggling on account of the pandemic. Discussions are said to be at an advanced stage and the deal could be worth $1.5-1.8 billion.
Blackstone said it had no comments to offer while messages sent to Prestige did not elicit a response till the time of going to press. Prestige’s net debt was Rs 8,174 crore for the fiscal ended March 31, up 10% from the year-ago period, according to the company’s last investor presentation.

Sources said Prestige is putting on the block 15 million sqft of office and malls. 8-10 properties are expected to be part of the deal. Prestige has 111 completed projects of 36 million sqft, which yield annual rentals of Rs 714 crore. Another 12 projects spread across 15 million sqft are under construction.
The deal will enhance Blackstone’s position as the largest real estate investor in the country. It will also have a bigger mall presence. Prestige has 10 operating malls spread across 7 million sqft and yielding annual rents of Rs 335 crore.
Blackstone’s retail arm, Nexus Malls, has nine malls, including the Seawoods Grand Central Mall in Navi Mumbai and Elante Mall in Chandigarh.
Last year, Blackstone and Prestige were in talks to merge their mall businesses but the deal did not materialise. TOI had reported earlier this year that Prestige was in talks with Singapore’s sovereign wealth fund GIC, Qatar Investment Authority (QIA) and Abu Dhabi Investment Authority (ADIA) for an investment of about $400 million. Those talks appear to have stalled.
Malls and hotels have been hit the hardest by Covid-19 because of low footfalls and zero travel. According to Crisil, malls in India have debt of Rs 4,200 crore but their revenues are set to halve this fiscal. Bulge bracket funds like Blackstone and Brookfield are actively looking to buy into malls in both tier-1 and -2 cities, which can be later bundled into an REIT.

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