Blackstone Seeking to Raise $710M From Fourth India REIT IPO

Blackstone filed a draft prospectus Thursday for the private equity titan’s fourth India REIT, with the US firm and co-sponsor Sattva Group seeking to raise INR 62 billion ($710 million) from the office trust’s initial public offering.

Dubbed Knowledge Realty Trust, the 55:45 JV of Manhattan-based Blackstone and Bengaluru’s Sattva would be the biggest-ever REIT IPO in India and the second-largest office REIT in Asia in terms of leasable area, according to the document. The seed portfolio spans 48.1 million square feet (4.5 million square metres) across 30 Grade A office assets in Bengaluru, Mumbai, Chennai, Hyderabad, Ahmedabad and Gurugram.

“With a multi-market geographical presence and assets comprising both front offices and integrated business parks, our portfolio reflects a broad proxy of the Indian office market,” the sponsors said in the filing.

The prospective IPO follows Blackstone’s sponsorship of three previous India REITs, including Embassy Office Parks, which the firm exited in late 2023 for $853.5 million, as well as Mindspace Business Parks and the retail-focused Nexus Select Trust.

Serving Tech and Finance

The sponsors expect Knowledge Realty Trust to be the largest office REIT in India in terms of gross asset value upon listing, with GAV standing at INR 594.5 billion as of 30 September 2024.

Some 95.8 percent of the portfolio’s GAV is located in the tech hubs of Bengaluru and Hyderabad and the country’s commercial capital of Mumbai, with the most spacious asset, a business park called Sattva Global City in Bengaluru, comprising a leasable area of 12.3 million square feet (4.1 million completed and 8.2 million under construction or in development).

Other large properties include the 4.2 million square foot Cessna Business Park in Bengaluru and the 7.3 million square foot Sattva Knowledge City in Hyderabad, both having been completed.

Post-listing, the portfolio’s weighted average lease expiry of 8.6 years will be the highest among Indian office REITs based on CBRE data, providing stability via consistent and predictable cash flows, the sponsors said.

“Our strategy to capitalise on our portfolio’s embedded organic growth focuses on leveraging the increasing demand for office space by offering high-quality assets in India’s key office markets and providing a comprehensive ecosystem to our tenants and their employees,” they said.

Founded in 1993, Sattva has operations in seven Indian cities and has delivered 142 projects totalling 80 million square feet of completed space, with a further 80 million square feet in various stages of planning and development.

More Mall Action

In addition to managing its 18-mall Nexus Select Trust, India’s first retail REIT, Blackstone is nearing a deal to buy South City Mall in Kolkata for as much as $400 million, Bloomberg reported Wednesday, citing people with knowledge of the matter.

The investment giant has tapped Citigroup to raise at least $200 million to back the purchase of the 1 million square foot mall in the West Bengal capital, the agency said in a follow-up report on Thursday.

The news comes after Nexus Select Trust in October announced its acquisition of the Vega City Mall in Bengaluru for INR 8.77 billion ($104 million). Blackstone had more than halved its stake in the retail REIT just two months earlier with a $542 million block sale of investment units.