Blackstone Close to Major Acquisition of Adani Realty Premier BKC Office Tower

The Blackstone Group is on the verge of securing a significant acquisition of Adani Realty's Inspire BKC, a high-profile commercial real estate project located at the outskirts of Mumbai's dynamic Bandra-Kurla Complex (BKC), according to sources familiar with the matter. The US-based private equity giant is anticipated to invest between Rs 1,800 crore and Rs 2,000 crore for the 800,000 sq ft office tower.

Over the past few years, Adani Group's real estate division has been assessing the monetization of this 10-storey office tower, engaging with both international and local investors such as Brookfield India and Shapoorji Pallonji Investment Advisors. Blackstone had previously expressed interest in acquiring this asset.

The discussions had been halted due to the Covid-19 pandemic in 2020 and the resulting uncertainties in office space demand. However, sources noted that the commercial property market has seen a significant recovery in the last eighteen months, coinciding with the return to office work.

Since then, Adani Inspire has completed several substantial office deals, and the tower's occupancy has surpassed 90%, renewing interest in the property.

Notable tenants of the office tower include Novartis, Reliance Nippon Life Insurance, Ascendas Firstspace Development Management, and MUFG Bank. Recently, coworking space provider Bhive Workspace secured over 62,000 sq ft in Inspire BKC under a five-year lease. The rental rate for this deal was established at Rs 205 per sq ft per month, with a clause for a 15% increase after three years.

While Adani Realty did not respond to inquiries by the time of reporting, and Blackstone chose not to comment, recent data indicates that net absorption in India’s top seven office markets reached a new post-Covid high at 41.97 million sq ft in 2023, marking it as the second highest year, only behind 2019. Institutional investors are showing strong confidence in the Indian office sector, encouraged by a positive growth forecast and consistent demand.

This confidence is spurring a flurry of deals among key global and domestic funds, highlighting the sector's resilience and its capacity to adjust to changing work dynamics, thus reinforcing the industry’s prospects for continuous growth.