Blackstone's REIT Journey in India: A Pioneer's Story
Blackstone's REIT journey in India has been a pioneering effort, with the company listing several REITs in the country and monetizing its investments.
BlackstoneReitIndiaReal EstateInvestmentReal EstateAug 11, 2024
Blackstone sponsored Nexus Select Trust REIT, the country's first retail property REIT, and co-sponsored Embassy Office Parks REIT. It also invested in Mindspace Business Parks REIT, sponsored by Mumbai-based K Raheja Corp.
Embassy REIT, the country's first listed REIT, came out with an initial public offering (IPO) in March 2019 and later got listed. Its shares have risen 25.4% since the IPO, and Embassy Office Parks has a market capitalization of ₹35,658.81 crore.
Next came MindSpace Business Parks REIT from the Blackstone stable, which got listed in 2020. Its share has risen 24.7% since the listing, and its market cap is ₹20,340.52 crore.
Interestingly, Blackstone had bought stakes in the properties of Embassy Group and stake in the special purpose vehicles or SPVs, which held assets and later shifted to Mindspace REIT.
Nexus built its portfolio of malls through acquisition of malls from companies such as Tata Realty, L&T, and so on. Nexus Select Trust was listed last year, and its share has risen 37.1% since listing, with a market cap of ₹20,763.08 crore. It had a portfolio of 17 centers with a space of about 10 million sq ft as on June. Recently, Nexus Trust said it is in talks to buy five new malls.
“Blackstone knew the REIT product well before it came to India. Many global investors became investors in REITs here because of Blackstone,” said the head of a global property consultancy. He said Blackstone had the knowledge of best practices, structuring of REIT, filing, and so on.
According to sources, Blackstone is also working on a mega REIT, which will have assets of Bengaluru-based Salarpuria Sattva and Panchshil Realty, and basic paper work has been done. However, it could not be independently confirmed with Blackstone.
Blackstone has been monetizing its investments in listed REITs by selling them to other investors. On Friday, two entities of Blackstone sold 21% in Nexus Select Trust and raised ₹4,455 crore through the stake sale. The units were sold at ₹138 apiece, as Blackstone's stake in the REIT has come down from 43.1% to 22%. Blackstone has exited its holdings in its listed REITs, including Embassy Office Parks and Mindspace Business Parks REIT.
A REIT is a trust that owns a pool of income-generating real estate assets held as special purpose vehicles (SPVs). At least 80% of these assets must be completed and income-producing.
REITs, which are mandated by Sebi to distribute at least 90% of their cash flow to unit holders, have a unique structure that allows investors to participate in the income generated by commercial real estate assets.
Typically, the income of these trusts comes from the rentals received from such properties. REITs offer a less risky alternative to investing in under-construction properties and also provide a regular income.
Frequently Asked Questions
What is a REIT?
A REIT is a trust that owns a pool of income-generating real estate assets held as special purpose vehicles (SPVs).
Who is the pioneer in listing REITs in India?
Blackstone is the pioneer in listing REITs in India, along with its partners.
What is the benefit of investing in REITs?
REITs offer a less risky alternative to investing in under-construction properties and also provide a regular income.
How many REITs has Blackstone listed in India?
Blackstone has listed several REITs in India, including Embassy Office Parks REIT, Mindspace Business Parks REIT, and Nexus Select Trust REIT.
What is the market capitalization of Embassy Office Parks REIT?
The market capitalization of Embassy Office Parks REIT is ₹35,658.81 crore.
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