Blackstone in Final Talks to Acquire Vrindavan Tech Village
Vrindavan Tech Village, located in Bangalore, is on the verge of being acquired by private equity giant Blackstone. The firm is currently in advanced negotiations with the IT park's authorities, with the deal expected to close around Rs.900 crore. This prominent IT park is one of Bangalore's largest, making it a significant acquisition for Blackstone.
Blackstone's Recent Real Estate Dealings
This potential acquisition follows a string of recent real estate investments by Blackstone. The private equity firm has been increasingly active in the Indian market, notably through its dealings with DLF. One of the most prominent examples from the foregoing year is Blackstone's Rs.810 crore acquisition of DLF's IT SEZ in Pune.
Competition for Prime Real Estate Assets
Blackstone is also reportedly vying for Unitech's IT Park in Gurgaon, competing against other global investors such as Xander Group and Mapletree. This aggressive pursuit of real estate assets underscores Blackstone's strategy of maximizing rental income in the growing Indian market. The expectation is for the firm to secure significantly higher rental yields through these acquisitions.
Vrindavan Tech Village: Land and Tenants
Vrindavan Tech Village's promoters hold 106 acres of land, with development occurring incrementally across these holdings. Some portion constitutes leasehold land belonging to the Karnataka state government, while the rest represents saleable area.
A very substantial 75 acres remain undeveloped, presenting further lucrative opportunities for Blackstone should it eventually acquire the IT Park. At the moment, roughly 2.1 million sq. ft. is currently leased out to a roster of prominent tenants, which include Cisco, Nokia, Ness Technologies, Sony, and Talisma. The deal signifies promising growth potential within the vibrant IT sector of Bangalore.
Financial Considerations and Strategic Location
Vrindavan Tech Village is estimated to be valued at Rs.2200 crore. With an existing debt burden of Rs.1200 Cr, the new owners of the park will also be required to repay these debts with dispatch.
It must be noted that the Vrindavan Tech Village project is subject to an existing arbitration with its former financier, Citigroup. The firm will also need to fulfill various financial requirements, including securing necessary clearance certificates from both the state government as well as the municipal authorities.
Strategically situated on the Outer Ring Road (ORR) in Bangalore, Vrindavan Tech Village benefits from excellent connectivity. The project is the brainchild of industrialist and Vikas Telecom chairman, Mithilesh Kumar Tripathi, and developed by the real estate firm, Assetz. Notably, neither Blackstone nor Assetz have commented on the ongoing negotiations, maintaining a discreet approach throughout the acquisition process.