Blackstone’s deal with Urban Infra Opportunities Fund collapses

Bengaluru: A deal that would have given global investor and India’s top commercial property owner Blackstone Group Lp a huge leg-up in residential play in the country has collapsed.

Blackstone was in advanced talks to buy Urban Infrastructure Opportunities Fund (UIOF), which has a Rs2,400 crore corpus, for around Rs800 crore but the deal fell apart due to a mismatch in valuation expectations, said three people familiar with the development.

UIOF has a large residential portfolio of assets and is managed by Urban Infrastructure Venture Capital Ltd, which is a subsidiary of Anand Jain-led Jai Corp Ltd. Jain has been closely associated with Mukesh Ambani’s Reliance Industries Ltd as a strategic advisor.

“The deal didn’t happen because of valuation mismatch between the two parties. Blackstone was really keen in acquiring the portfolio,” said one of the three people mentioned above, who did not wish to be named.

Blackstone’s real estate arm has committed around $4.1 billion across 27 investments in India, making it possibly the largest owner of commercial office assets in the country. Singapore’s sovereign wealth fund GIC Pte Ltd, which bought a stake in DLF Ltd’s rental arm for Rs8,900 crore last year, would be the other large investor in office projects in India.

“Blackstone has scaled up its commercial office business considerably and was looking to build a residential investment portfolio. Over the last two years, it has also built its shopping mall portfolio. It was interested to acquire the UIOF portfolio because it would get access to a pan-India spread of projects but the two parties didn’t agree on the value,” said a second person.

Blackstone declined to comment on the deal. A UIOF spokesperson did not respond to email queries.

UIOF is one of two funds managed by Urban Infrastructure Venture Capital, the other being Urban Infrastructure Real Estate Fund, which is a $295 million offshore fund.

Had the deal closed, Anarock Property Consultants was going to be brought in to manage the residential assets in the portfolio. “Anarock was supposed to step in only once the transaction was concluded but the deal itself fell apart,” said the third person.

UIOF has done around 27 investments from the fund across cities. The fund was launched in mid-2006.livemint

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