Blackstone Leads $120M Capital Infusion Into India’s Embassy Developments

In March, CEO Stephen Schwarzman celebrated 20 years of Blackstone investments in India (Getty Images)

Indian builder Embassy Developments Ltd has received INR 10.6 billion ($120 million) in fresh equity capital via the conversion of warrants by entities including funds managed by Blackstone, as the US private equity titan continues to bet on one of its favourite property markets in Asia.

The investment, consisting of INR 6.45 billion from Blackstone funds and INR 4.15 billion from Embassy affiliate Bellanza Developers, reinforces EDL’s financial foundation and long-term growth trajectory, parent Embassy Group announced in a LinkedIn posting.

The funding led by NYSE-listed Blackstone is expected to support the launch of projects valued at more than INR 150 billion across 7.7 million square feet (715,353 square metres), positioning Embassy to scale its operations and deliver sustained value across the residential and commercial portfolio, according to the Bengaluru-based group.

“This capital infusion significantly strengthens our equity base and reinforces the deep trust in EDL’s long-term growth vision,” said Embassy Developments managing director Aditya Virwani. “With this, we’re well positioned to scale our operations and deliver sustained value across our residential and commercial portfolio.”

Appetite Unquenched
Manhattan-based Blackstone first joined forces with Embassy over a decade ago when the companies assembled the Embassy Office Parks portfolio, later spinning off the 45.3 million square foot platform into India’s first publicly listed REIT. The firm led by chairman and CEO Stephen Schwarzman sold down its interest in Embassy REIT and exited its remaining 23.59 percent stake in the trust in late 2023 for INR 71 billion (then $853.5 million).

Embassy Developments managing director Aditya Virwani

In 2021, Blackstone acquired Embassy Industrial Parks, a joint venture of rival Warburg Pincus and the Indian group, for an undisclosed sum, gaining a portfolio with 10.6 million square feet of logistics and warehouse assets near major cities in India. That buy became the basis for a new logistics platform, Horizon Industrial Parks.

In March of this year, Blackstone filed a draft prospectus for its fourth India REIT, dubbed Knowledge Realty Trust, with the firm and co-sponsor Sattva Group seeking to raise INR 62 billion ($710 million) from the office trust’s initial public offering. The prospective IPO follows Blackstone’s sponsorship of Embassy REIT, Mindspace Business Parks and the retail-focused Nexus Select Trust.

March also saw Blackstone agree to acquire a 40 percent stake in Pune-based builder Kolte-Patil Developers for INR 11.7 billion ($134 million), marking the fund management giant’s first investment in residential real estate in India. In December, the country’s antitrust regulator had approved a plan for Blackstone to acquire a stake in Bengaluru developer Bagmane, which has 30 million square feet of operational business parks in the tech hub and another 5.3 million square feet under development.

Resilient Growth
While most of Asia Pacific’s commercial real estate markets endured a decline in first-quarter investment volume, India escaped the drop as activity in the world’s most populous nation crept up 1 percent year-on-year to $400 million, according to MSCI’s latest Capital Trends report. Volume in regional giants Japan and China fell 25 percent and 16 percent, respectively, to $11 billion and $8.1 billion during the first three months of the year.

India’s investment volume in the 12 months to the end of March jumped 65 percent year-on-year to $6.6 billion, the data provider said, as domestic forces like urbanisation and rising wealth boosted activity and investors widened their traditional focus on offices to other property types like warehouses and malls.

“In any transition to a new global trade order, investors may further gravitate toward markets and sectors with secular growth drivers,” MSCI said. “The data centre market, with demand fuelled by a surge in AI and cloud computing, is one example; India, a market with much higher GDP and population growth rates than major economies globally, is another.”