Embassy Office Parks REIT on Tuesday said it has agreed to acquire a large business park 'Embassy TechVillage' in Bengaluru from realty firm Embassy group, Blackstone and some other investors for Rs 9,782.4 crore. Embassy REIT is India's first publicly-listed REIT (Real Estate Investment Trust) sponsored by Blackstone and Embassy group. It got listed on stock exchanges last year.

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In a statement, Embassy REIT said it has "agreed to purchase Embassy TechVillage assets from affiliates of Embassy Sponsor, Blackstone Sponsor and other selling shareholders for a total consideration of Rs 97,824 million (USD 1.3 billion)". The proposed deal is subject to unitholders' and regulatory approvals. The acquisition comprises 6.1 million square feet (msf) of completed area, 3.1 msf of under-construction area, and two proposed 518-keys Hilton hotels.

The acquisition will increase Embassy REIT's commercial office portfolio by 28 percent to 42.4 msf. Mike Holland, Chief Executive Officer of Embassy REIT, said, "the proposed accretive acquisition of Embassy TechVillage will mark the addition of another trophy asset to our existing office portfolio, while reinforcing our stable cash flows".

Embassy TechVillage is a large scale business park located in the leading Outer Ring Road sub-market of Bengaluru, with a diversified blue-chip and predominantly multinational-occupier base, including JP Morgan, Cisco, Sony and Flipkart, he said. "The acquisition further deepens our presence in Bengaluru, which remains India's strongest office market, and significantly enhances our scale and ability to deliver embedded growth.

"We are delighted to purchase an asset of the quality and scale of Embassy TechVillage at a 4.6 percent discount to the average of the two independent valuations," Holland said. Jitendra Virwani, Chairman & Founder of the Embassy Group said, "we are pleased to deliver on our commitment to support the growth of the REIT platform".

The REIT proposes to fund the acquisiton by issuing equity of around Rs 6,000 crore through a combination of an institutional placement of about Rs 3,700 crore and a preferential issue of units to third-party selling shareholders of around Rs 2,300 crore, the statement said. The REIT also plans to refinance existing Embassy Tech Village debt facilities of up to Rs 3,600 crore through a combination of equity and issuance of new coupon-bearing debt.