This Wednesday sees the initial public offering of Brookfield India REIT, which hopes to raise INR 3,800 crore ($520 million) as it becomes just the third real estate investment trust to trade on the Indian stock exchanges.
The REIT, sponsored by an affiliate of Canada-based Brookfield Asset Management, has a price band of INR 274-275 per share for the IPO at a minimum lot size of 200 shares. The share issue is to open on 3 February and close on 5 February before the shares list on the BSE and the NSE on 17 February.
Once launched, Brookfield India REIT will join two other office trusts — Embassy Office Parks REIT and Mindspace Business Parks REIT, both sponsored by US private equity giant Blackstone — as India’s only listed real estate investment trusts.
Prolific Property Buyer
“Brookfield has been a prolific investor in the country,” Ankur Gupta, managing partner and head of India real estate at Brookfield Asset Management told BloombergQuint in a video interview. “Over the past seven years, our commercial real estate portfolio has stretched from almost nothing in 2014 to more than 42 million square feet today.”
A significant chunk of Brookfield’s acquisitions have been funnelled into an initial portfolio for the REIT, consisting of four office parks in Mumbai, Gurugram, Noida and Kolkata spanning a combined 14 million square feet (1.3 million square metres).
That total includes 10.3 million square feet of completed area, 100,000 square feet of space under construction and 3.7 million square feet of future development potential. Gupta puts the REIT’s initial portfolio yield at 7.95-7.98 percent.
Headlining the seed portfolio is Kensington office park, which is an IT special economic zone property within the Hiranandani Gardens township in Powai, central Mumbai. The asset, with one completed building measuring 1.5 million square feet of leasable area, was acquired through a 2016 deal in which Brookfield Asset Management spent $1 billion to buy 4.5 million square feet of commercial space from a developer controlled by billionaire Niranjan Hiranandani and his brother Surendra. The REIT acquired the development in 2019.
The other three assets in the initial portfolio are sprawling campus-type office parks under the Candor TechSpace banner.
The properties were acquired by Brookfield Asset Management in 2014 when it agreed to pay $525 million for Indian developer Unitech Corporate Parks’ Candor Investments subsidiary, which held 100 percent of four special economic zones and 60 percent of two other office park developments. Brookfield later went on to buy out the remaining 40 percent equity in the two projects. The soon-to-be-listed entity acquired the three Candor TechSpace assets in 2015.
All four projects in the REIT’s initial portfolio have committed occupancy of over 90 percent. The portfolio’s pipeline assets include two other Candor TechSpace projects, plus certain Brookfield-owned properties to which the REIT has the right of first offer.
Trust in Office Space
Brookfield India REIT follows the path of Blackstone’s Embassy Office Parks REIT, which raised $722 million through its pioneering 2018 IPO, and Mindspace Business Parks REIT, which raised $600 million when it went public last July.
Brookfield Asset Management, headquartered in Toronto, had $575 billion in assets under management across 30 countries as of 30 September 2020. In India, the firm owns about $17 billion worth of real estate, infrastructure, renewable energy and private equity assets.
In its most recent Indian mega-deal, the asset manager in October 2020 agreed to buy 12.5 million square feet of office and co-working assets from real estate firm RMZ Corp for $2 billion in the country’s biggest real estate transaction ever.
A fourth Indian office REIT could soon be on the way after developer DLF said that bankers and consultants had been hired to prepare for an offering sponsored by its joint venture with Singapore’s GIC.