Blackstone readying Asia’s largest REIT IPO of up to $1b

June 20, 2023

Private equity firm and asset manager Blackstone is finalising plans to launch the initial public offering of its office portfolio-based real estate investment trust in India and the size of the issue is expected to be in the range of $800 million to $1 billion.

The 45 million square feet (msf) of assets that will constitute the REIT are Nucleus Office Parks, which is wholly-owned by Blackstone and assets of two joint ventures that the US-based asset manager has with Pune-based Panchshil Realty and Bengaluru-based Salarpuria Sattva group. This will be the largest REIT IPO in Asia in terms of square footage.

The REIT will likely be listed early next year, sources said, with the firm still in the process of appointing investment bankers. In response to an email, Blackstone declined to comment on the matter.

Nucleus Office Parks has over 20 msf of commercial assets in some of the prime locations of Mumbai, Gurugram, Chennai, Bengaluru, and Ahmedabad. In its joint ventures it manages another 22-25 msf.

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Office assets

A source with knowledge of the developments said the portfolio of office assets it has was of very high quality and could command a 10-15 per cent premium over the valuation of assets under the Embassy Group, with which Blackstone owns Embassy Office Parks REIT.

“It is more diversified,” said an industry official on the office assets held under Nucleus Office Parks and the two JVs. They also have the advantage of being in good locations and high occupancies, the office spaces being well leased out, the official added.

Blackstone has invested in a number of projects developed by Salarpuria Sattva group such as Knowledge City Office Park, Knowledge Park, and Knowledge Capital. The two companies also acquired Global village Tech Park from Coffee Day Enterprises in 2020. In its JV with Panchshil, it has a majority stake in Express Towers in Mumbai’s Nariman Point, while it has also invested in a few projects in Pune.

This will be the second majority Blackstone-sponsored REIT in the country after Nexus Select Trust, which listed last month.

Quick monetisation

Blackstone has a track record of quickly monetising its real estate assets in India. In 2019, it launched Embassy Office Parks REIT and a year later Mindspace Business Parks REIT was listed in which it had a small stake that it subsequently sold off. It started work on making its mall portfolio REIT-ready last year and listed it this year.

According to Blackstone’s website, it owns over 125 msf of Grade A office space in India across key office markets and IT hubs.

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