Blackstone Group has been one of the biggest investors in India’s real estate story over the years and it remains firmly committed towards the future prospects of the industry as per reports. Stephen Schwarzman, the Chairman at Blackstone, has already called India the strongest performer globally for the Group and has given a serious hint about potentially exploring acquisitions of distressed assets in the near future. Blackstone Group has been present in India from the year 2006 onwards and has already pumped in $15 billion here. This includes real estate investments along with private equity plays across enterprises.
Schwarzman is also the co-founder and chief executive at Blackstone and has already confirmed the bullish perspective of Blackstone regarding India. However, he has also opined that this perspective only applies for the long term. He also talked of how there are issues with slower economic growth in India along with limited extensions of credit by banks and neo-banks and this will naturally create the demand for alternative liquidity sources amongst company owners. He has also opined that acquiring distressed assets may be the way forward.
Key factors worth keeping in mind
Blackstone Group has stated that India remains a highly attractive market for real estate investments and it possesses long-term confidence in the country’s prospects. As a result, the Blackstone Group is looking at transforming into active lenders or buyers in the current market scenario according to its Chairman. The company has funds to the tune of $150 billion which has been committed globally for catering to these needs. Blackstone India will also be emphasizing on the country’s real estate sector for creating spaces that can be hired by growing IT and ITeS companies and warehousing spaces in the future.
Blackstone Group remains interested in India’s growth story since the country has witnessed exponential growth over the years and it has the youngest working age group in the world at the moment along with making massive advancements in education and technology. A range of 5-10 years is being considered by the Blackstone Group which is looking at new opportunities for buyouts in the third largest economy of Asia amidst the economic slump and credit crunch which is creating new demand for capital across affected companies. Blackstone has invested approximately $6 billion in the country over the last 1 ½ years or 18 months.
Blackstone Group has three business divisions in the country including real estate, private equity and tactical opportunities. It has already acquired a shadow bank along with manufacturers of packaging material and automobile components. Blackstone Group is also the biggest commercial real estate owner in India and was the first entity to sell units in an REIT (real estate investment trust) in 2019. This acceleration, according to the company, has been driven by the economic slowdown fused with the credit crunch.
What else should you know?
Blackstone Group invested Rs. 380 crore in January, 2020 or roughly $52 million in a warehousing unit owned by Allcargo Logistics Limited. There was an option included by the company for increasing this stake over the next 12 months on the basis of achieving performance milestones that were previously agreed upon. Last month, Blackstone Group proceeded to acquire the technology park owned previously by Coffee Day Enterprises Limited by paying Rs. 150 crore as the first tranche out of the agreed total amount of Rs. 2, 700 crore.
Blackstone Group has observed opportunities going up for buyouts throughout the world in the current scenario. It is presently the biggest alternative asset management firm and will be doubling investments in the Indian commercial realty space over the next 3-5 years. The real estate investment portfolio should be doubled in the near future since the company is extremely satisfied with the performance of its Indian assets till now. Schwarzman has also opined that the operations in India provide the highest returns globally for the Blackstone Group at the moment. Schwarzman founded the Blackstone Group back in the 1980s with Pete Peterson, his partner, and the Group manages investments exceeding $500 billion throughout varied asset classes like real estate, private equity, credit and more. It is the biggest alternative asset manager in terms of assets under management (AUM).