
Embassy’s Jitu Virwani prepares for first REIT
Blackstone is transferring more investments into India’s first real estate investment trust just ahead of the proposed initial offering. The US investment giant’s local partner in the pioneering real estate deal, Embassy Group, is said to also be tweaking its own commitment to the project by removing some assets from the lineup.
Changes in the portfolio of business parks to be included in the market listing, which is expected to list in September, have been reported widely in the Indian press, with official filings for what is anticipated to be a $1 billion IPO expected within the next few weeks.
The REIT, which was registered with Securities and Exchange Board of India (SEBI) in July 2017 as Embassy Office Parks, is currently preparing a draft red herring, according to the Economic Times.
The estimated market capitalisation of the REIT is still being reported at $5 billion.
Blackstone Puts in More Business Parks
In the rejiggering, Blackstone will be transferring Mumbai, National Capital Region and Pune region assets into the vehicle. According to the Economic Times, these include 247 Park and Blackstone’s 50 percent stake in the First International Financial Center (FIFC), both in Mumbai.
Other Blackstone assets in the REIT will include Express Towers, BlueRidge Special Economic Zone, Galaxy IT Park, Oxygen Boulevard and DLF Ackruti Info Parks.
Until just a few months ago, Blackstone had been trying to sell business park interests in Pune and elsewhere, including the 1.5-million-square-foot BlueRidge Special Economic Zone and DLF Ackruti Info Parks, which measure about 2.5 million square feet. Blackstone was also seeking to sell its 1.35 million square foot Galaxy IT Park in Noida, as well as the 1.8 million square foot Oxygen Boulevard facility which is also located in the planned city in Uttar Pradesh state with Singapore’s CapitaLand and India-focused private equity firm Xander having been seen as potential buyers.
Embassy Adjusting its Commitment

Embassy Manyata Business Park is among the assets included in the portfolio
Embassy, which also has real estate joint ventures with Warburg Pincus and WeWork in India, is also reported to be making some adjustments to what it puts into the upcoming REIT.
The 25-year-old firm founded by entrepreneur Jitu Virwani, now is said to be planning to exclude the six million-square-foot Embassy Tech Village in its home town of Bangalore from the REIT and will also be keeping apart most of its investment in Embassy GolfLinks Business Park, although there is some disagreement amongst sources about how much of that project will ultimately be committed to the trust.
There are clear indications that Embassy will include in the portfolio its Embassy Manyata Business Park, Four Seasons Hotel at Embassy One and Embassy TechZone in Pune.
KJ George, a government minister and earlier reported to be one of the participants in the venture, has now apparently opted out of the REIT completely, as the Karnataka state politician and business leader ultimately opted against including 50 percent stake in the 4.5-million-square-foot Embassy GolfLinks in Bangalore to the REIT. Panchshil Realty, a Blackstone partner, will get shares in the REIT upon listing.
Long Road, Much Interest
Although the potential for listing a REIT listing in India was first proposed in 2007, SEBI’s REIT regulations were first established in 2014 and amended in 2017, before getting some additional fine tuning in April of this year. In addition to the Embassy vehicle, Mumbai-based finance group IIFL Holdings has also registered a REIT with the regulator.
So far, interest appears strong. Press reports suggest that international investors are looking closely at the REIT, in part because of the 8-plus percent yields being generated by grade A office space in major Indian cities. According to Bloomberg, bankers for the Embassy Office Parks transaction are Bank of America, Morgan Stanley, Kotak Mahindra Bank, JPMorgan Chase, Axis Bank, Deutsche Bank, HSBC Holdings and JM Financial.
Blackstone, which raised $7.1 billion in June for its Blackstone Real Estate Partners Asia II (BREP II), has an estimated $5 billion invested in India and has rapidly established itself as the country’s biggest commercial landlord.
In July, the New York-based firm bought a Chennai office complex for $124 million, after investing $123 million in a pair of Hyderabad office parks in April. In March of this year the alternative investment giant bought a 50 percent stake in a pair of office towers in Mumbai worth $1.3 billion.
Other investors showing strong interest in Indian real estate opportunities include Singaopore’s GIC and Ascendas, with New York-based KKR and Warburg Pincus, as well as Canada’s Brookfield Asset Management making major investments in property projects in the country.
As an individual investor US, will you be creating a way that we can invest in the India REIT?
I am a Brookfield investment fan. I already own BEP & TERP.