Blackstone Real Estate partners to exit Synergy Property for Rs 260 crore

BANGALORE: Blackstone Real Estate Partners, an affiliate of The Blackstone Group LP, is exiting its investment in Bangalore-based Synergy Property Development Services in a deal valued at Rs 260 crore.

The world's largest real estate private equity firm invested Rs 60 crore in the property management company in 2008. This was the first real estate investment by the US-based private equity firm in India.

"Blackstone is invested for over five years now and we are looking at various options of exits. The due diligence is over," Synergy Property Development Services chairman & managing director Sankey Prasad said.

Blackstone with $69 billion of assets under management will either sell the stake to another fund or go for public listing of the property consultancy firm. Synergy Property Development Services is valued at Rs 750 crore.

Blackstone Real Estate Partners hold 35% stake in the real estate consultancy firm, while majority is held by founder and promoters of the company. "Synergy will continue to hold majority stake in the company," Prasad said.

Synergy Property Development Services is in project management consultancy business across segments including commercial, hospitality, health care, high-end residential projects in India and globally. The company has delivered 100 million sq ft in the last 10 years and has 135 million sq ft under management. It employs 950 professional globally and operates across India, Middle East and Far East.

Blackstone has been acquiring rental yield properties across major cities like Mumbai, Bangalore, Delhi and Pune. It had also entered into a joint venture with Panchshil Developers in Pune and Embassy Group in Bangalore to buy commercial assets. Since late 2009, Blackstone's real estate funds invested or committed to invest $25.3 billion in equity through their active debt and equity funds globally.

Majority of the funds that invested in 2007-08 are exiting their investment and is being cautious to commit capital in the Indian real estate. Real estate private equity investments was recorded at $276 million (Rs 1,638 crore), 46% lower than a year ago, said a recent report of Cushman & Wakefield, an international property consulting firm. PE investment in real estate peaked in 2007 with $6.76 billion committed.