India's largest REIT IPO: Sattva Group, Blackstone-sponsored trust files papers for ₹6,200 cr REIT issue
Blackstone-Sattva backed Knowledge Realty Trust files for ₹6,200 crore IPO. This will be the second largest REIT in Asia by size and the largest in India
Sattva Developers and Blackstone-backed Knowledge Realty Trust on March 6 filed the draft offer documents with market regulator SEBI to launch its maiden REIT public issue to raise more than ₹6,200 crore, as per the draft offer document filed.
This will be the second largest REIT in Asia by size and the largest in India based on the gross asset value.
KRT plans to raise around ₹6,200 crore through REIT-IPO, according to its DRHP.
KRT's total portfolio is 48 million sq ft (37 million square feet completed) across 30 Grade A office assets across six major cities, making it India's most geographically diverse Office REIT, it said.
Knowledge Realty Trust (KRT) has filed the Draft Red Herring Prospectus (DRHP) with SEBI to launch Initial Public Offering (IPO) and list the REIT on stock exchanges, as part of its strategy to monetise its 30 prime office assets across major cities totalling 48.1 m sq ft which includes 37.1 m sq ft of completed area, 2.8 mn sq ft of under construction area and 8.2 mn sq ft of future development area, it said.
Of the total portfolio, 90 per cent is leased with marquee tenants - 76 per cent with MNCs and 45 per cent with GCCs (Global Capability Centres), it said
The portfolio is spread across Hyderabad, Mumbai, Bengaluru, Chennai, Gift City Ahmedabad and Gurugram, the document showed.
KRT will be the largest REIT in India in terms of Net Operating Income (NOI) and Gross Asset Value which is estimated at around ₹60,000 crore, it said.
What are REITs?
REITs are investment vehicles that own, operate and manage a portfolio of income-generating properties for regular returns. REITable properties include commercial assets that can generate steady rental income. They operate like mutual funds or shares.
REITs have to be mandatorily listed on exchanges and traded like securities. Small investors can buy units of REITs from both primary and secondary markets just as they buy shares or mutual funds.
REITs in India
At present, there are four listed REITs in India -- Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, and Nexus Select Trust. The existing four REITs have a combined portfolio of over 126 million square feet of Grade A office and retail space across the country. Since their inception, these REITs have collectively distributed over ₹21,000 crore to unitholders.
Apart from Nexus Select Trust, the other three REITs are backed by rent-yielding office assets. Nexus owns a large portfolio of retail real estate spaces.
This will be the fifth public listing of Blackstone India Real Estate business, including three listed REITs and one of Ventive Hospitality.
Sattva Developers has so far constructed 74 million square feet across seven Indian cities in commercial, residential, co-living, co-working, hospitality, and data center sectors. An additional 75 million square feet area is in planning and implementation.
Blackstone, is one of the leading global investment firms, with massive exposure in the Indian real estate market.
Experts' Take
“The REIT market is expanding rapidly in India with the active participation of large developers and investors. The listing of the new REIT will further ease the liquidity in the real estate sector through increased participation of retail investors. REITs are an indispensable investment tool to diversify investor portfolios and provide consistent income,” said Shrinivas Rao, FRICS, CEO, Vestian.
According to Vestian's latest report on ‘REITs: Reshaping India’s Commercial Space’, nearly 60% of pan-India office stock is REIT-worthy across the top seven cities. The majority of REIT-worthy assets are concentrated within the commercial hubs of the top seven cities, driven by the presence of branded Grade-A office buildings in these prime locations.
“As the regulatory environment matures, India is likely to witness more and more REIT listings with expansion into new real estate segments. Favourable regulatory environment, better returns on investment, and a rapidly expanding office market are likely to provide impetus to the REITs market in India,” he said.
With inputs from PTI
