Blackstone invests in Ozone’s Residential Project
Blackstone Group LP has invested Rs.175 crore in a housing project in Chennai
Blackstone has investments in several commercial properties in cities such as Mumbai and Bangalore which generate rental income.
Bangalore: Blackstone Group LP has invested Rs.175 crore in a housing project in Chennai, after making several investments in rent-yielding commercial assets earlier.
Bangalore-based Ozone Group is developing the mixed-use project named Metrozone at Anna Nagar in Chennai. Apart from residences, the 42-acre project also has retail space and a hotel. Blackstone has invested in the residential portion of the project.
“The money has come in through the NCD (non-convertible debenture) route. We plan to use the money to reduce our fairly high-cost debt. We are developing 15 million sq. ft of space now and plan to take it up to 30 million sq. ft by next year,” said Ozone Group chairman and managing director S. Vasudevan.
The Metrozone project is in a stage where residences are being handed over to residents. Around 400 apartments have been handed over already, and the remaining 1,200 apartments will be handed over the next 24 months in phases, Vasudevan said.
Blackstone declined to comment on the Ozone transaction. An analyst said the Ozone deal was interesting, since Blackstone has invested mainly in high-value office spaces so far. It has investments in several commercial properties in cities such as Mumbai and Bangalore which generate rental income.
“Blackstone has been a patient investor during the slowdown and then done several transactions when the time was right in mainly rental assets. If they are selectively investing in residential projects, it may be a good way to test the market to see if there is scope, and if the experience is good they may do more deals in this space,” said Ambar Maheshwari, managing director, capital markets, at property advisory Jones Lang La Salle India.
Urban Infrastructure Venture Capital Fund and HDFC Venture Capital Ltd have sold some of their stakes in Metrozone, Vasudevan said. “Both are contemplating exits in six months,” he added.
Blackstone made two investments in India earlier this year. In April, it invested Rs. 550 crore to acquire a 60% stake in Vrindavan Tech Village (VTV), a special economic zone (SEZ) in Bangalore. It will be developed by Embassy Property Developments Pvt. Ltd, which invested Rs. 450 crore. In another big-ticket transaction concluded this year, Blackstone, along with Pune-based Panchshil Realty, bought out Express Towers, a well-known office building in Nariman Point, Mumbai’s oldest business district.
Earlier, Blackstone had invested Rs.150 crore in Embassy Lake Terraces, a residential project by Embassy Property in Bangalore in 2010 and exited the investment in 2012, “with very profitable returns”, said a person familiar with the development who didn’t want to be named.
Ozone has hired Mumbai-based developer Wadhwa Group’s chief operating officer Srinivasan Gopalan as its new chief executive.
by Madhurima Nandy for The LiveMint
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