Blackstone & Its Partners Plan Mega REIT in India

BY Realty+

US-based fund house Blackstone and its partners – Pune-based Panchshil Realty and Bengaluru-based Salarpuria Sattva – are looking to float a mega real estate investment trust (REIT) and list it in the country.

Sources familiar with Blackstone and its partners said they plan to bring around 45 mn sq ft into the REIT. It will be the largest in Asia in terms of square footage adding the REIT could raise Rs 7,000 crore to Rs 8,000 crore through a public issue, the draft papers for which will be filed with the capital markets regulator next year.

The plan is to bring the assets owned by Blackstone’s office arm Nucleus Office Parks, including those bought from Prestige Estates Projects last year, sources said. Blackstone bought a portfolio of commercial assets from Prestige, including office properties, hotels and malls, for $1.5 bn. Nucleus has assets of 22 mn sq ft in top cities such as Mumbai, NCR, and Bengaluru, among others. They also plan to bring assets of the Blackstone-Salarpuria joint venture in Hyderabad, Bengaluru, and other cities, and its JV with Panchshil in Pune and others. The Blackstone-Salarpuria JV has 12 to 15 mn sq ft of assets and Blackstone Panchsil has about 10 mn sq ft.

Blackstone and Salarpuria jointly acquired a 3.3 mn sq ft office park – Global Village Tech Park – in Bengaluru owned by Coffee Day Enterprises for Rs 2,500 crore in early 2020. This will be the third REIT that Blackstone is listing in the county with its partners. Blackstone and its JV partner Embassy listed a REIT called Embassy Office Parks REIT in April 2019 and raised about Rs 4,750 crore through an IPO. This was the country’s first listed REIT and owns and manages properties worth 42 mn sq ft.

Blackstone and K Raheja Corp also floated a REIT called Mindspace Business Parks REIT and listed it in August 2020 and raised Rs 4,500 crore through an IPO. The REIT has 31 mn sq ft of space. Blackstone’s global rival Brookfield also listed an India-focused REIT in February 2021. Early this week, Blackstone sold an about 8% stake in Embassy Office Parks REIT through block deals in the open market for $326 mn or Rs 2,650 crore.

Blackstone’s mall arm Nexus Malls is also gearing up for a REIT. It is planning to file the draft red herring prospectus for the retail REIT soon and could raise $500-600 mn in the country, adding that the fund manager has already selected investment bankers for the issue. When the retail REIT gets listed, it would be the first pure-play REIT in the country.

Nexus Malls has around 10 mn sq ft of retail properties and is the largest owner of the malls. However, sources say the Blackstone-Panchshil-Salarpuria REIT will come out only after the REIT of Nexus Malls. With international experience and a global network, Blackstone has been a pioneer in listing REITs in the country. Its new REITs will deepen the markets for such instruments here. The banker said its partners will also gain from the REIT listing and raise funds.

Tags : US Blackstone Pune Panchshil Realty Bengaluru Salarpuria Sattva real estate investment trust REIT