By Raghavendra Kamath
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.
While Blackstone and its partners did not respond to emails on the subject, sources familiar with the developments said they plan to bring around 45 million sq ft in the REIT. It will be the largest in Asia in terms of square footage, sources said, 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 billion. Nucleus has assets of 22 million sq ft in top cities such as Mumbai, NCR, Bengaluru, among others.
“They also plan to bring assets of Blackstone-Salarpuria joint venture in Hyderabad, Bengaluru and other cities, and its JV with Panchshil in Pune and others,” sources said.
The Blackstone-Salarpuria JV has 12 to 15 million sq ft of assets and Blackstone Panchsil has about 10 million sq ft, market experts said, though it could not be independently verified.
Blackstone and Salarpuria jointly acquired a 3.3 million 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 million 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 milion sq ft of space.
Blackstone’s global rival Brookfield also listed a India-focused REIT in February 2021.
Early this week, Blackstone sold an about 8% stake in Embassy Office Parks REIT through block deals in open market for $326 million or Rs 2,650 crore.
Kotak Realty Fund and Abu Dhabi’s sovereign fund ADIA have bought the units, reports said. Blackstone has exited its stake in Mindspace REIT early this year.
DLF, the country’s largest listed developer, is also working on a REIT and plan to list on the exchanges.
Meanwhile, 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 million in the country, recent reports said, 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 milion 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 global network, Blackstone has been a pioneer in listing REITs in the country. Its new REITs will deepen the markets for such instruments here,” said an investment banker who did not want to be quoted The banker said its partners will also gain from the REIT listing and raise funds.