American firm Blackstone likely to buy off South City Mall

Kolkata: The private equity giant Blackstone is likely to soon acquire the South City Mall in Kolkata, the largest in Eastern India.

Sources that the New York-based asset management company is likely to invest Rs 3500 crore approximately to buy South City Mall and a luxury residential project Altair in Colombo. South City is a consortium of real estate companies which include Emami Realty Ltd and Merlin Group.

Sources said if this deal goes through then it can easily be called the largest investment by a private equity player in Kolkata’s real estate market which has so far evinced a lukewarm response from institutional investors. Blackstone, the American firm, is known as India’s largest commercial real estate owner which has its headquarters at Park Avenue in New York. It is a global leader in real estate with $325 billion capital under management reportedly.

South City Projects Ltd, the company which built the mall in 2008 adjacent to the high-rise residential complex bearing the same name, is co-owned by some of the top builders such as Shrachi Group, Merlin Group, Park Chambers Group, Emami Group, Jugal Kishore Khetawat, and Rajendra Kumar Bachhawat. After a major revamp carried out in 2018, the South City mall, which ranks among the top 10 malls in India, has a gross leasable area of about 800,000 square feet. With service areas and car parks, the mall is spread over 1.1 million square feet. The mall, which has just about 2 per cent vacant area, earned gross revenues of Rs 1,300 per square foot in the last financial year. According to available reports, earlier this year, a top official from Blackstone Inc had expressed a desire to invest another $17 billion in India.

The firm’s assets under management in the country are close to $50 billion, including $30 billion in real estate and $20 billion in private equity (PE) investments.