February 24, 2024

Blackstone-backed Nexus Select Trust likely to launch retail REIT IPO in early May to raise Rs 4,000 cr

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Global investment firm Blackstone-sponsored Nexus Select Trust is likely to launch India’s first retail REIT public offer in early May to raise up to Rs 4,000 crore.

In November last year, Nexus Select Trust filed the draft red herring prospectus (DRHP) with market regulator Sebi to launch its retail REIT (Real Estate Investment Trust).

Nexus Select Trust has a portfolio of 17 operational shopping malls across 14 major cities, covering a 9.8 million square feet area valued at around Rs 23,000 crore.

According to sources, the Nexus Select Trust is likely to hit the capital market in early May with its REIT IPO. It is expecting to get the Sebi nod soon.

The size of the IPO of Nexus Select Trust REIT will be around Rs 4,000 crore, of which Rs 1,600 crore would be a primary offering of shares.

This will be the third REIT sponsored by Blackstone.

It launched India’s first REIT Embassy Office Parks and then Mindspace Business Parks REIT.

REIT, a popular instrument globally, was introduced in India a few years ago to attract investment in the real estate sector by monetising rent-yielding assets. It helps unlock the massive value of real estate assets and enable the participation of retail investors.

At present, there are three listed REITs — Embassy Office Parks REIT, Mindspace Business Parks REIT and Brookfield India Real Estate Trust — on Indian stock exchanges, but all of these are leased office assets.

Nexus Select Trust will be the first REIT with rent-yielding retail real estate assets.

In its portfolio of 9.8 million square feet of retail real estate, Nexus Select Trust has also included Select Citywalk Mall in south Delhi.

There are around 3,000 stores across 17 shopping malls while the number of brands is nearly 1,100.

On the operational front, the occupancy level in the malls currently stands at 94 per cent with an annual footfall of over 130 million.

Part of the proceeds will be utilised to bring down debt, which stood at Rs 4,500 crore at the end of the June quarter.

The net operating income of Nexus Select Trust is projected to grow by nearly Rs 1,400 crore during the last fiscal.

Blackstone has a big presence in the Indian market, with an overall asset under management estimated to be USD 60 billion across various sectors.

Real estate accounts for nearly USD 22 billion of this market across over 40 investments.

Blackstone is the largest office owner in India with an office portfolio of around 100 million sq ft across 38 assets in 7 cities.

Of this, around 13 million sq ft of offices are under construction and 16 million sq ft for future development.

Blackstone has created the Nucleus Office Parks platform with 25 million sq ft for hosting 100 per cent owned commercial assets.

Blackstone additionally owns over 10 million sq ft of retail space under the Nexus Mall portfolio and 35.5 million sq ft of logistics space under the Horizon Industrial Parks portfolio and Greenbase Industrial and Logistics Park.

India’s first REIT of Rs 4,750 crore issue size was listed in April 2019 by Embassy Office Parks, sponsored by Blackstone and realty firm Embassy Group.

In August 2020, K Raheja and Blackstone-sponsored Mindspace Business Parks launched the country’s second REIT to raise Rs 4,500 crore.

Blackstone has exited from Mindspace REIT now.

Global investment firm Brookfield has listed the country’s third REIT after raising Rs 3,800 crore through an IPO.