Blackstone Group is currently in advanced negotiations to acquire Adani Realty’s commercial real estate project, Inspire BKC, located on the outskirts of Mumbai’s bustling business hub, Bandra-Kurla Complex (BKC), according to sources familiar with the matter.
The US-based private equity giant is expected to invest between Rs 1,800 crore to Rs 2,000 crore for the office tower, which offers approximately 800,000 square feet of space.
Adani Group’s real estate development arm has been exploring options to monetize this 10-storey office tower for several years, engaging in discussions with both global and domestic investors, including Brookfield India and Shapoorji Pallonji Investment Advisors. Blackstone Group had previously expressed interest in acquiring the property.
However, discussions were stalled following the outbreak of the Covid-19 pandemic in 2020, amid uncertainties surrounding office absorption growth. Nevertheless, the commercial property market has rebounded significantly in the past eighteen months with the gradual return to office work, leading to renewed interest in Adani Inspire, which is now over 90% leased.
Key occupiers of the office tower include Novartis, Reliance Nippon Life Insurance, Ascendas Firstspace Development Management, and MUFG Bank. In a recent lease transaction, coworking office space provider Bhive Workspace secured over 62,000 square feet across seven offices in Inspire BKC through a long-term lease agreement spanning five years.
The lease rentals for this transaction have been set at Rs 205 per square foot per month, with provisions for a 15% escalation after three years.
India’s top seven office markets witnessed net absorption surpassing the 40 million square feet mark, reaching 41.97 million square feet in 2023, signaling a significant post-Covid milestone and the second-highest annual absorption after 2019.
Institutional investors are demonstrating strong confidence in the Indian office sector, buoyed by its positive growth prospects and consistent demand, resulting in a surge in activity with prominent global and domestic funds closing substantial deals swiftly.
The resilience of the office real estate sector amidst economic fluctuations and its adaptability to evolving work dynamics have reinforced investor confidence, highlighting the industry’s potential for sustained growth in the foreseeable future.