Blackstone's REIT Journey in India: A Story of Many Firsts
Blackstone's REIT journey in India has been marked by several firsts, including the country's first retail property REIT and the first listed REIT.
BlackstoneReitIndiaReal EstateInvestmentReal Estate MumbaiAug 11, 2024
Blackstone's REIT journey began with the listing of Embassy Office Parks REIT, the country's first listed REIT, in March 2019. The REIT's shares have risen 25.4% since the initial public offering (IPO) and Embassy Office Parks now has a market capitalization of ₹35,658.81 crore.
Next came Mindspace Business Parks REIT, 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 Select Trust, another REIT from the Blackstone stable, was listed last year and its share has risen 37.1% since listing. Its market cap is ₹20,763.08 crore and it had a portfolio of 17 centres with a space of about 10 million sq ft as on June.
According to sources, Blackstone is also working on a mega REIT which will have assets of Bengaluru-based Salarpur is Sattva and Panchshil Realty. However, it could not be independently confirmed with Blackstone.
Blackstone has been monetising 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.
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.
Blackstone's knowledge of the REIT product and its best practices have been instrumental in attracting global investors to the Indian REIT market. As a pioneer in the Indian REIT market, Blackstone's journey has been marked by several firsts, including the country's first retail property REIT and the first listed REIT.
Information
Blackstone is a global private equity firm that has been investing in Indian real estate for several years. Its investments in Indian REITs have been successful, with several of its REITs listing on the Indian stock exchanges.
Blackstone is a global private equity firm that invests in real estate, private equity, and other alternative assets. It has been investing in Indian real estate for several years and has been instrumental in shaping the Indian REIT market.
K Raheja Corp is a Mumbai-based real estate developer that has sponsored Mindspace Business Parks REIT.
Embassy Group is a Bengaluru-based real estate developer that has sponsored Embassy Office Parks REIT.
Nexus Select Trust is a retail property REIT that was listed on the Indian stock exchanges last year.
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).
What is the minimum percentage of assets that must be completed and income-producing for a REIT?
At least 80% of the assets must be completed and income-producing.
What is the unique structure of REITs that allows investors to participate in the income generated by commercial real estate assets?
REITs have a unique structure that allows investors to participate in the income generated by commercial real estate assets through the distribution of at least 90% of their cash flow to unit holders.
What is the typical source of income for REITs?
The typical source of income for REITs is the rentals received from the properties they own.
What is the benefit of investing in REITs compared to under-construction properties?
REITs offer a less risky alternative to investing in under-construction properties and also provide a regular income.
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