Embassy group in talks with Blackstone to sell warehouse biz for Rs 1,800 cr enterprise value

Realty firm Embassy group is in the advance stage of talks with global investment firm Blackstone to sell its warehousing and industrial parks business at an enterprise value of around Rs 1,800 crore, sources said.

In 2015, the Bengaluru-based Embassy group had formed a joint venture with private equity firm Warburg Pincus to build industrial parks.

Warburg Pincus has a 70 per cent stake while the Embassy group has a 30 per cent shareholding in the joint venture firm -- Embassy Industrial Parks.

According to sources, the Embassy group is in discussion with the Blackstone group for the complete divestment of the JV firm.

The deal is likely to be completed during this month, they added.

Embassy group spokesperson declined to comment. Property consultant Anarock too refused to comment.

The JV is developing warehousing projects at Chakan in Pune, Sriperumbudur and Hosur in Tamil Nadu; Farrukhnagar and Bilaspur in Delhi NCR; and Kothur in Hyderabad.

The total portfolio of the JV firm is around 16 million sq ft, of which 4 million sq ft is operational.

Last year, the Embassy group was in talks with Everstone-backed Indopsace and ESR to monetise this business but the deal did not materialise.

Embassy group has a lot of land bank to create a similar large portfolio of warehousing and industrial parks.

Indian warehousing sector has grown rapidly on strong demand from third-party logistics (3PL) and e-commerce sectors. Many developers have entered into this emerging segment to diversify their businesses.

Embassy group, led by Jitu Virwani, is a major player in Indian commercial real estate.

The group, along with Blackstone, launched India's first Real Estate Investment Trust (REIT) in 2019 to raise Rs 4,750 crore through public issue.

Embassy Group is also merging its projects with Indiabulls Real Estate.

Embassy Group already has around 14 per cent stake in Mumbai-based IBREL, which is part of the Indiabulls group.

After this proposed merger plan gets concluded, Embassy Group will have a controlling stake and become a promoter of the merged entity.

The Embassy group also owns WeWork India, which is into the coworking and flexible workspace domain. It has a presence in the co-living business as well.