InvestorQ : Why is Prestige Estates selling its property portfolio to Blackstone?
Dawn Cherian made post

Why is Prestige Estates selling its property portfolio to Blackstone?

Mitali Bhutta answered.
9 months ago

South India based Prestige Estates of the Irfan Razzack group will sell assets worth Rs.11,000 crore to Blackstone of the US. The idea of this sale deal is to lighten its balance sheet and use the monetized value of the sale to defray most of its debt.

Like a lot of Indian companies, Prestige also appears to be of the firm belief that in the post-COVID scenario it would be possible to survive and thrive only if they are low on debt. It is in this direction that this decision has been taken.

Prestige will sell a total of 21 million SFT of assets to Blackstone. The overall portfolio sold to Blackstone will include six complete office assets, nine retail assets, two hotels and four under-construction offices; spread across the states of Karnataka, Kerala, Gujarat, Tamil Nadu and other states.

Let us look at how the actual deal will be implemented in practice. The deal is expected to be consummated through a combination of primary and secondary investments as well as asset transfers where applicable. The company is looking at multiple approaches.

This will add to the heft of Blackstone in India. It is already the large institutional owner of commercial real estate in India with a portfolio worth $20 billion. Once the liquidity is generated, Prestige will develop nearly double the space sold with a lighter balance sheet.