Blackstone, Embassy buy Four Seasons Hotel project in Bangalore

Blackstone and Embassy will jointly acquire the shares of Goldman Sachs and those of minority shareholder and Southern land tycoon Dayanand Pai.

By Anshul Dhamija & Boby Kurian, TNN | Oct 07, 2014, 10.25 AM IST

BANGALORE: Private equity giant Blackstone has agreed to acquire a 50% stake in India's second Four Seasons Hotel project in Bangalore, which was put on sale by majority owner Goldman Sachs.

Blackstone, which owns the over $10-billion global hospitality firm Hilton Worldwide, stepped in at the last minute to partner developer Embassy Group to clinch an acrimonious deal that was in the making for nearly two years.

Blackstone and Embassy will jointly acquire the shares of Goldman Sachs and those of minority shareholder and Southern land tycoon Dayanand Pai, in the project valued at Rs 605 crore. The debt component of the project is around Rs 275 crore, owed to a consortium led by State Bank of India.

Located in Bangalore's northern suburb, the hospitality project is part of a 1-million-sq-ft lifestyle development CityView that comprises a 230-room Four Seasons hotel, 110 branded residences, and 200,000 sq ft of office and retail space.

Some of Infosys co-founders and actress Deepika Padukone have invested in the Four Seasons-branded residences that carried a price tag of over $1 million.

In 2012, Blackstone partnered Embassy Group in an equal joint venture firm Embassy Office Parks, which controls about 15 million sq ft of rent-yielding office space across the two IT hubs of Bangalore and Pune.

TOI wasn't able to ascertain if the Four Seasons Hotel project would come under this JV, which is expected to be taken for a REIT (real estate investment trust) listing in the near future.

Blackstone declined to offer comment on this story, while an emailed query to Goldman Sachs remained unanswered at the time of going to press. Embassy Group CMD Jitu Virwani was unreachable for a comment.

Blackstone has till date been lapping up iconic commercial office spaces in the country, spending close to $1 billion, with little interest in other real estate asset classes. While Blackstone exited from a luxury residential project in Bangalore with an IRR of over 40%, the private equity fund has invested in a hospitality project in Kolkata that is being developed by the Salarpuira Group.

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