Blackstone in talks to acquire Inspire BKC

7 May 2024 , 02:42 PM

Blackstone Group is in advanced talks to purchase Adani Realty’s commercial real estate project Inspire BKC, which is located on the outskirts of Mumbai’s bustling business hub Bandra-Kurla Complex (BKC), according to people familiar with the matter.

According to sources, the US-based private equity firm is set to pay between ₹1,800 Crore and ₹2,000 Crore for the office skyscraper, which would have 800,000 square feet.

For the past two years, Adani Group’s real estate development arm has been researching how to monetise this 10-story office tower, holding conversations with global and domestic investors such as Brookfield India and Shapoorji Pallonji Investment Advisors.

Blackstone Group had previously expressed interest in buying out this property.

Following the advent of the Covid-19 epidemic in 2020 and concern about growth in office absorption, these conversations were unable to further, according to the people quoted above.

“One of them stated that the commercial property sector has experienced a recovery in the past eighteen months due to the return to office work. They also mentioned that Adani Inspire has seen numerous significant office deals during this time, resulting in over 90% occupancy of the tower and reigniting interest in the property.”

The office tower’s primary tenants include Novartis, Reliance Nippon Life Insurance, Ascendas Firstspace Development Management, and MUFG Bank.

In the most recent leasing deal, coworking office space provider Bhive Workspace acquired roughly 62,000 square feet across seven offices in Inspire BKC on a five-year contract.

The lease charges for this deal have been fixed at ₹205 per square foot per month, with a contingency in the agreement allowing for a 15% increase after three years.

According to current data, net absorption in India’s top seven office markets surpassed 40 million sq ft and will reach 41.97 million sq ft by 2023.

This not only represents a new post-Covid milestone, but it also ranks as the second largest yearly absorption, after only the levels achieved in 2019.

Institutional investors are expressing strong confidence in the Indian office sector, which is fueled by an optimistic growth outlook and consistent demand. This mindset has sparked a considerable increase in activity, with prominent global and domestic funds quickly closing large transactions.

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