Prestige group completes sale of commercial assets worth Rs 7,467 cr to Blackstone

Realty firm Prestige Estates Projects Ltd on Tuesday said it has completed sale of commercial assets worth Rs 7,467 crore to global investment firm Blackstone in the first round of divestment.

In November last year, the Bengaluru-based firm had signed term sheet to sell a large portfolio of completed as well as under-construction office, retail and hotel properties to Blackstone for an enterprise value of Rs 9,160 crore.

Prestige Estates Projects had earlier this month signed definitive agreements with Blackstone to sell 12 assets/undertakings comprising completed office, retail and hotel properties.

In a regulatory filing, Prestige group said it has completed first phase of its deal with Blackstone Group.

The enterprise value forming part of phase one is about Rs 7,467 crore.

The second phase of the transaction is expected to get completed by the end of next quarter.

Including both the phases, the overall transaction, include 100 per cent stake sale in six completed office projects (include a hotel) and 50 per cent stake sale in four under construction projects.

As per the deal, it will divest 85 per cent stake sale in nine shopping malls.

Irfan Razack, Chairman, Prestige Group, said: "We believe that this transaction will further strengthen our foundation and help us in gearing up for the next level of growth."

This transaction will also aid in building long-term strategic partnership with Blackstone Group and leverage the respective strengths of both to create value for the stakeholders, he said in a statement.

"We have a strong development pipeline of about 43 million sq ft office and retail portfolio in the key locations across the cities and in the next 4-5 years it is projected to yield rentals of over Rs 3,000 crore per annum, growth close to 10x of our post deal rental portfolio of about Rs 3,00 crore," he added.

Venkat K Narayana, Chief Executive Officer, Prestige Group, said this transaction is well aligned with capital recycling strategy coupled with financial and strategic benefits.

"Financially, it provides us with the best opportunity to deleverage and further strengthen the balance sheet. Our consolidated net debt as on December 31, 2020 was Rs 8,464.5 crore," Narayana said.

Proceeds from the transaction will be used to repay debt, for growth and for construction of on-going projects, he added.


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