City based venture capital firm Next Orbit Ventures today said it has partnered US-based Interups to launch the country’s first hospitality Real Estate Investment Trust (REIT) to raise around Rs 1,000 crore. The regulatory filing for the Bharatham Hospitality REIT is contemplated in the next 90 days and its IPO is expected to be launched in January next year, Next Orbit Ventures said in a statement. “US-based Interups and CNP Business Advisory Services, the sole Indian Investment Manager (IM) for SEBI registered Next Orbit Ventures Fund I and II (NOVF) have signed a joint venture to launch India’s first hospitality REIT – Bharatham Hospitality REIT,” it said.
NOVF will be the primary sponsor applicant to the REIT through its investments in Hospitality Venture Undertaking from its real estate scheme and its REIT size will be around Rs 1,000 crore, it said. “The joint venture effort is to acquire financially stressed but operationally viable hospitality assets, either directly into the REIT or through SPVs, and leased out to a professionally run project management company,” it said. CNP Founder Ajay Jalan said, “the proposal is fast progressing with most of the intermediaries engaged to support, execute and setup the REIT, SPVs and the project management company.” He also said this initiative will offer a clear turnaround to the hospitality sector to acquire and lease viable and operational assets to professionally run management groups and in exchange for a balanced income dividend to the benefit of the investor of NOVF.
“The REIT is expected to introduce a very dynamically structured financial instrument to the market with a basket of fixed and variable income instruments to be generated from leasing of properties, asset operations and market investments out of liquidity reserves,” Jalan added. Interups Chief Financial Officer Laxmi Prasad said, “We serve as a link between capital pools in the US with growth opportunities in India. There is a unique pool of regulated self-directed retirement assets from US Markets, which seeks such low risk long-term growth opportunities worldwide. ITUP has access to these funds and will pool them through specially structured and regulated/exempted investment vehicles and invest into the REIT and NOVF.”