India’s First SM-REIT Opens for Bidding on Dec 2: Price Band Above Rs 10 Lakh; Details Inside
Kunal Moktan, Director of Property Share, highlights the significance of the first SM-REIT in India, PropShare Platina, which aims to raise Rs 352.91 crore through its primary offering. The issue opens on December 2, 2023, with a price band of Rs 10 lakh
SmreitPropshare PlatinaReal EstateInvestmentSebiReal EstateNov 26, 2024
The price band for the issue is set between Rs 10 lakh and Rs 10.5 lakh per unit. Bidding for the issue begins on Monday, December 2, and closes on Wednesday, December 4, 2023. Investors can apply for a minimum of one unit, with a total of 3,361 units available. The issue is entirely a fresh issuance of Platina units, with no offer-for-sale component.
SM-REITs are a new asset class regulated by the Securities and Exchange Board of India (SEBI) as a subclass within the REIT framework. These trusts are designed for assets valued between Rs 50 crore and Rs 500 crore. Like traditional REITs, SM-REIT units must be listed on stock exchanges, but with a minimum lot size of Rs 10 lakh. SM-REITs are not permitted to invest in under-construction assets or land and must distribute at least 95% of their earnings as dividends to unit holders.
The net proceeds from the PropShare Platina issue will be used to acquire the Prestige Tech Platina asset through Special Purpose Vehicles (SPVs). The remaining funds will be utilized for general corporate purposes. 75% of the issue has been reserved for qualified institutional bidders (QIBs), with the remaining 25% available for non-institutional investors (NIIs).
PropShare Platina includes 246,935 square feet of office space in the Prestige Tech Platina building, a LEED Gold-certified office building located on the Outer Ring Road (ORR) in Bangalore. The building, developed by the Prestige Group, is proposed to be fully leased to a US-based tech company through a fresh 9-year lease with a 4.6-year weighted average lock-in and rent escalations every three years.
The scheme offers investors a projected distribution yield of 9% for the financial year 2025-26, 8.7% for the financial year 2026-27, and 8.6% for the financial year 2027-28. The units are expected to be listed on the BSE, with a tentative listing date of December 9, 2023.
To support the scheme, the Investment Manager, PropShare Investment Manager (Property Share), has decided to waive all annual management expenses, including investment and property management fees, for FY25 and FY26. A nominal fee of 0.25% will be charged in FY27, and 0.30% from FY28 onwards. Property Share will also invest a minimum of 5% of the units of the scheme.
ICICI Securities is the sole lead manager for the offer, and Cyril Amarchand Mangaldas serves as the Indian Legal Counsel to Property Share Investment Trust and the Investment Manager. KFin Technologies is the registrar for the offer, Axis Trustee Services is the trustee, and PropShare Investment Manager is the investment manager for the offer.
SM-REITs like PropShare Platina provide investors with an alternative asset class, offering hybrid returns through regular rental yields and potential capital appreciation of the underlying real estate. Kunal Moktan, Director of Property Share, expressed his pride in introducing this product to the Indian financial markets. He emphasized the significance of PropShare Platina as a pioneering venture in the real estate investment sector.
Frequently Asked Questions
What is the price band for the PropShare Platina issue?
The price band for the PropShare Platina issue is between Rs 10 lakh and Rs 10.5 lakh per unit.
When does the bidding for PropShare Platina open and close?
The bidding for PropShare Platina opens on Monday, December 2, and closes on Wednesday, December 4, 2023.
What is the projected distribution yield for PropShare Platina?
The projected distribution yield for PropShare Platina is 9% for the financial year 2025-26, 8.7% for 2026-27, and 8.6% for 2027-28.
How many units are available for the PropShare Platina issue?
A total of 3,361 units are available for the PropShare Platina issue.
What is the minimum application size for the PropShare Platina issue?
The minimum application size for the PropShare Platina issue is one unit.
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