US-based fund house Blackstone and its partners — Sattva group and Panchshil Realty – are looking to raise $1 billion (over Rs 8,400 crore) through an initial public offering (IPO) of their mega real estate investment trust (REIT) next year, said sources.
“They plan to file DRHP (draft red herring prospects) early next year and come out with an IPO in mid-2025,” sources said.
The REIT will have a commercial property portfolio of 50 million sq ft, which will be the largest in Asia in terms of portfolio and one of the largest in the world, sources said.
They added that there will be three sponsors – Nucleus Office Parks owned by Blackstone, Sattva group of Bengaluru and Panchshil Realty of Pune. While Nucleus and Sattva will bring in 20 million sq ft and 25 million sq ft, respectively, the rest will be brought in by Panchshil.
Blackstone offered no comments at the time of going to press. Sattva and Panchshil could not be contacted.
A new Hindenburg report in August had said that Backstone gained from changes in REIT regulations by SEBI since it’s chief Madhabi Puri Buch’s husband was an advisor with the US fund house. However, SEBI has denied the allegations.
“There was no truth in allegations. Now they are moving ahead with the plans,” sources said.
Morgan Stanley, which has previously worked on listings of Blackstone’s other REITs, has been roped in for the mega REIT offering along with home-grown investment banks, sources said.
This will be the fourth REIT listing from the Blackstone stable after Embassy Office Parks REIT with Embassy group, Mindspace Business Parks REIT with K RahejaRaheja Corp and its own retail property REIT called Nexus Select Trust.
Blackstone is also coming out with an IPO for Ventive Hospitality, a hotel company owned by it along with Panchsil. The company received SEBI’s approval recently and may come out with IPO soon.
Nucleus has 14 Grade A commercial Parks across nearly 20 million sq ft in Mumbai, Gurugram, Bengaluru and other cities. Sattva Group’s properties are mostly in Bengaluru and Hyderabad. Panchshil has properties in Pune.
A report by Vestian this month noted that the country’s REIT market is currently at a nascent stage compared to major global economies, with only four listed REITs, covering an area of 125 million sq ft across the retail and office markets.
The market capitalisation of REITs is about 13.7% of the total listed real estate sector in India – lower than mature markets such as the USA (98.9%, Australia (94.8%) and the UK (92.5 %.), the report said.
About 60% of the country’s Rs 4.5-lakh-crore worth Grade A office stock can be included in REITs, the report said.