Blackstone-Embassy REIT game changer for India’s real estate sector
The initial public offering (IPO) of Blackstone Group Lp-sponsored Embassy Office Parks real estate investment trust (REIT) opened on Monday, in a game changer for India’s real estate sector and a leap forward for the New York-based investor which opened its India real estate division in 2007.
This would be India’s first real estate investment trust or REIT.
The Embassy Office Parks REIT includes Blackstone’s own assets as well as those in partnership with Embassy Group, comprising 33 million sq. ft across Mumbai, Pune, Bengaluru and Noida, 24 million sq. ft of which is completed and 95% leased. This includes 11 assets—seven office parks and four buildings.
It plans to raise ₹4,750 crore (including the anchor allocation) from its 18-20 March IPO. On Friday, Embassy Office Parks REIT raised ₹1,743 crore by allocating units to institutional investors as part of its so-called anchor book allocation, according to stock exchange filings.
Arvind Nandan, Executive Director, Research, Knight Frank India, “India is finally witnessing the country’s first REIT listing. On one hand, for investors, it will provide avenues for earning annuity income and capital appreciation besides being an excellent tool for portfolio diversification. On the other hand, for the supply side, it will significantly increase the depth of the market and bring in more institutional players and capital. A successful REIT listing would provide a significant boost to the scale of commercial projects and push the commercial space into a different growth paradigm.”
“REIT will thrive and create a trust in developers as people are willing to covert a long leap annuity business with the asset holding capacity by the developers. Through this the REIT’s will be able to rate funding on the said asset class and this will share great benefit to the people. With the Involvement of REIT; people who are not able to buy an asset they are able to benefit through the opportunity to have an ownership of the assets as an investor with the help of submitting insights through a form of trust with annuity income and long term lease.” Said Parth Mehta, Managing Director, Paradigm Realty.