Blackstone-backed REIT said delayed on disputes

Embassy Group planning to seek about $600m listing a trust backed by properties

Embassy Group, an Indian partner of Blackstone Group LP, is facing a potential roadblock to its listing of the nation’s first real estate investment trust amid disputes with investors in two of its properties, people with knowledge of the matter said.

Embassy Group has been planning to seek about $600 million (Dh2.20 billion) listing a trust backed by properties including Embassy GolfLinks and Embassy Manyata Business Park, which count Rolls Royce Holdings Plc and Microsoft Corp. as tenants, the people said. Kelachandra Group and Manyata Group oppose the inclusion of the two Bengaluru office parks in the REIT, according to people, who asked not to be identified because the information is private.

Those two developments, which Embassy holds through a joint venture with Blackstone called Embassy Office Parks, generate the most rental income among the five to six assets planned for inclusion in the REIT, the people said. The disagreement with Kelachandra Group, a holder of Embassy GolfLinks, and Manyata Group, which has a stake in the eponymous business park, would need to be resolved before a deal goes ahead, they said.

The Embassy offering would become the first REIT listed in India since the securities regulator established rules for the asset class in September 2014. Investors including the Employees Retirement System of Texas have expressed interest in gaining exposure to the Indian property market through listed REITs. Embassy has applied to the Indian securities regulator for the REIT, Embassy Office Parks CEO Michael Holland said earlier this month. Embassy had aimed to file a prospectus in December, someone with knowledge of the matter said. “No decision has been taken to proceed or to withdraw from the REIT listing process, no decision has been made on which assets would be included,” Holland said