ICRA’s Provisional AAA Ratings to India’s Maiden Retail REIT
Ratings Agency ICRA has assigned a provisional AAA rating with a stable outlook to India’s maiden retail Real Estate Investment Trust (REIT) Nexus Select Trust floated by an affiliate of US-based private equity major Blackstone Group. This retail REIT will have an initial portfolio of 17 retail malls, 3 office spaces, 2 hotels, and one solar power generation plant across the country. Nexus Select Trust received registration from the capital market regulator the Securities Exchange Board of India (SEBI) on Sept 15. The sponsor of the Trust is Wynford Investments Ltd an affiliate of Blackstone Inc while the investment manager of the trust is Nexus Select Mall Management, which is 100% owned by the Blackstone Group. The Nexus Select Trust proposes to acquire approx 100% shareholding in 18 entities and 50% shareholding in another SPV from the sponsor group. Through this it will own 17 retail malls with a leasable area of 9.79 mn sq ft, three office spaces with a leasable area of 1.34 mn sq ft two hotels, and one renewable energy asset. The ratings of Nexus Select Trust also consider the REIT’s low leverage profile debt/NOI of 4 times for FY2023 as per ICRA’s base case estimate, and loan to asset value (LTV) of around 22% which provides financial flexibility to fund the future acquisition. ICRA expects the leverage to remain below 25% of loan-to-value based on the Trust’s current business plan thereby supporting strong credit profile said Rajeshwar Burla Group Head at ICRA. According to him, the rating services comfort from the trust’s diversified portfolio of retail malls spread across the country with a presence in prominent micro-markets of key metro cities and a strong operational track record.
Tags : ICRA Ratings Agency Real Estate Investment Trust Blackstone Group Securities Exchange Board of India