The Biggest Real Estate Deal in Bangalore

The Biggest Real Estate Deal in Bangalore

Currently one of the fastest growing cities of the world which can rightly be called as the Silicon Valley of India, Bangalore has emerged as one of the most sought after places at present for IT industries as well as investors in the real estate sector. The city is increasingly becoming a technological, innovational, and commercial center and thus the need for quality real estate. Skyscraper commercial buildings, luxurious houses and IT Parks and Buildings have emerged and taken the place of ancient structure. Among the many real estate transactions that have taken place in Bangalore, one deal stands out as the biggest real estate deal in Bangalore: This is exhibited by the recent co-investment by the Embassy Group and Blackstone of a large portfolio of commercial real estate assets.

In this blog, we will also discuss this historic deal in detail, and the effects that it has had on real estate as well as future of Bangalore in terms of growth.

The Biggest Real Estate Deal: The first transaction that I want to focus on is an acquisition of Embassy Group by Blackstone

The largest real estate transaction in Bangalore and one of the largest in India is the strategic alliance of one of the Indias leading real estate company Embassy Group and Blackstone, a global private equity company in which the former has acquired a portfolio of commercial properties. This deal which was fixed at ?10,000 crores ($1. 3 billion USD) was one of the biggest transactions that revolutionized Bangalores commercial property market.

The subject transaction entailed the purchase of various income generating premises; tech parks, offices and mixed development that were mainly occupied by large global corporations. Due to this acquisition some of the properties that were considered of notable significance were the Embassy Manyata Business Park, Embassy TechVillage and the Embassy GolfLinks Business Park. These properties are strategically situated in some of the premier business districts in Bangalore, and some of the global giants such as IBM, Microsoft and Intel have their bases here adding to the values of these properties.

Also read: The Biggest Real Estate Deal in Bangalore

Key Players Involved:

Embassy Group:
The Embassy Group is among the leading real estate developers of India and is known for its quality of commercial and residential projects. This group was established by Jitu Virwani and the company is one of the most significant stakeholders in the real estate business for more than three decades. Embassy Group has delivered some of the best known real estate developments in Bangalore, encompassing expansive office spaces, upscale residential enclaves and integrated habitat communities. Some of its commercial projects especially the tech parks have influenced greatly the real estate the Bangalore.

Blackstone:
Blackstone is an international investment company with emphasis on private equity, property, and credit assets. It is worth noting that Blackstone has had its eyes set on India real estate especially in Bangalore for over three years. Blackstone being a world class investor with a very large experience in property management, the deal with Embassy group was done to fully exploit the rising business space demand in Bangalore.

This was the biggest deal that had ever happened in Bangalore and also was the biggest acquisition that India has seen in its real estate market and was a sign of global investors showing interest in the Indian real estate market.

Effectiveness of the Deal in Altering the Face of Bangalore Real Estate Market

This given deal that existed between the Embassy and Blackstone company had extensive ripple effects on the real estate market in Bangalore particularly to commercial valuation benchmarks in the city. Here are some key ways in which the deal influenced the market:

1. Increased Valuation of Commercial Properties:
Over the years Bangalore has been been a favored location for IT companies and multinationals, which has fuelled the need for commercial office spaces. But this deal was a start and beginning of the new standards of property value in the city. Called for a transaction value of ?10,000 crores, it introduced the reality of the commercial real estate of Bangalore. After this deal, prices for commercial property jumped for spaces which are prime and evident with the growing need for quality office spaces in Bangalore.

2. Global Investor Confidence:
The amount of investment negotiated in the Embassy-Blackstone deal was enormous and clearly pointed to the fact that international investors hold a lot of faith in the Indian real estate especially in cities such as Bangalore. This paved the way to increased interest from other foreign investors thus resulting to increased FDI particularly in real estate property in the city. This also helped the growth of Bangalore economy as well as played a great role in making Bangalore as one of the best locations for conducting business.

3. Consolidation of Office Space:
It also led to optimization of prime office space in Bangalore one of the key outcomes of the deal. Entailing of several tech parks and commercial properties by single owner or company helped in management improvement of the assets in terms of infrastructures and facilities provided to the tenants. This also gave a good opportunity to large corporations who wanted to lease out their office spaces from a sane, well-managed portfolio of buildings thereby discharging them responsibilities in the city.

You may also read blog - New Launch Residential Projects in Mumbai to know

4. Boost to Commercial Infrastructure Development:
The same deal between Embassy and Blackstone also provide the blueprint for more commercial infrastructure in Bangalore. The money which was earned through the deal was used in improvement and enlargement of the known facilities, as well as the creation of new ventures. This led to the provision of more offices, technology parks and other complex development to address this emerging market need for the commercial real estate in the city.

Conclusion

Embassy Groups ?10,000 Crores deal with Blackstone is considered as the largest real estate transaction in Bangalore and among the largest across India. This record breaking deal has not only redefined the citys commercial property market but has further enhanced Bangalores destination as a leading business and financial centre of the world. Given the ongoing expansion of the city and its ability to lure the international companies and investors, it is evident that Bangalore shall continue to offer some of the most important and huge deals in REAL ESTATE in the coming years.