Blackstone, Embassy files for REIT, plans to raise over ₹5,000 cr
Global investment company Blackstone and realty firm Embassy Group Monday filed its offer document with markets regulator Sebi to launch the country’s first real estate investment trust (REIT) to raise over ₹5,000 crore.
Embassy Office Parks, the joint venture firm of Blackstone and Embassy, has filed the draft red herring prospectus (DRHP) with the regulator to launch REIT, which would be Asia’s largest in terms of portfolio size of 33 million sq ft, people aware of the matter said.
The JV firm proposes to raise over ₹5,000 crore through its REIT, with an option to raise further 25%, they said.
The issue is likely to hit the capital market this fiscal, depending on the regulatory approvals and market conditions. Securities and Exchange Board of India (Sebi) had notified REIT’s regulations in 2014, allowing setting up and listing of such trusts, which are very popular in some advanced markets. However, not a single REIT has been launched and listed so far. REIT is an investment tool that owns and operates rent-yielding real estate assets. It allows individual investors to make investment in this platform and earn income.
According to sources, Embassy Office Parks, a leading
NEW DELHI:
player in commercial real estate, has put 33 million sq ft of office and hospitality assets under its proposed REIT comprising of 7 business parks and 4 city-centric buildings spread across Mumbai, Bengaluru, Pune and Noida.
Out of 33 million sq ft, about 24 million sq ft area is operational at 95% occupancy and yielding rental income of over ₹2,000 crore annually.
Another 3 million sq ft area is under construction and 6 million sq ft area in pipeline. Embassy Office Parks’ rental income is expected to rise by 55 per cent in the next 3 years as it expects to lease area at a higher rent. Presently, its office spaces are leased at 35% lower than the market rental and the same would be be revised while renewing the lease agreements with the clients.