Age ncies
Global investment firm Blackstone-sponsored Nexus Select Trust has filed the draft paper with market regulator Sebi to launch
India's first public issue of retail REIT to raise around $500 million (about Rs 4,000 crore), sources said.
Nexus Select Trust has a portfolio of 17 operational shopping malls across 14 major cities, covering about 10 million square feet
of area valued at around $3 billion.
As per the sources, Nexus Select Trust has on Thursday filed the Draft Red Herring Prospectus (DRHP) with the Securities and
Exchange Board of India (Sebi) and is looking to hit the capital market with India's first retail REIT (Real Estate Investment Trust)
public issue in the first half of the 2023 calendar year.
The size of the initial public offer (IPO) of Nexus Select Trust REIT will be around $500 million, they added. This will be the third
REIT sponsored by Blackstone.
It had earlier launched India's first REIT — Embassy Office Parks REIT– 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 enables 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 these are leased office assets.
Nexus Select Trust will be the first REIT with rent-yielding retail real estate assets.
In its portfolio of 10 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 in its shopping malls while the number of brands is approximately 1,000.
The sources said Blackstone is very bullish on the growth story of India's retail sector, which has bounced back sharply post the
second wave of the Covid pandemic.
“The fundamental of India's retail business is very strong. People are spending money and watching movies,” a source said.
Unlike the office segment, there are not many players in the shopping malls business and also the supply of Grade A malls is
also limited, the sources said.
On the operational front, the occupancy level in the malls currently stands at 94 per cent with an annual footfall of over 130
million, they said. The sales in its malls during the April-June quarter have been 24 per cent more than the pre-Covid level.
exus Select Trust has done leasing of around 3.5 million square feet over the last three years and three months. Its senior
management team consisting of nine CXOs (with 20+ years average experience) led by Dalip Sehgal (former executive director of
Unilever India) as CEO is supported by over 500 employees.
The board of directors is highly diversified and experienced. The key board members are Michael Holland (ex-CEO of the
Embassy REIT), Arjun Sharma (chairman and director of the Select Group), Jayesh Merchant (ex-CFO of Asian Paints), Sadashiv
Rao (former director of IDFC) and Tuhin Parikh (head of BX India Real Estate).
Blackstone has a real estate portfolio of 85 assets totalling 150 million square feet across the office, retail and logistics segments.
In the office, Blackstone is collectively one of India's largest office landlords (41 assets totalling 101 million square feet), while in
logistics and industrial space, Blackstone is one of India's largest warehousing landlords (21 assets totalling 38 million square feet).
Blackstone has recently set up a fully-owned platform ‘Lumina' to invest in data centres across Asia, with an initial focus on India.
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. Global investment firm Brookfield has listed the country's third REIT after raising Rs 3,800 crore through an IPO.
The public offer comprises of fresh issue of up to Rs 1,600 crore and the offer for sale (OFS), according to the draft red herring
prospectus (DRHP).
The net proceeds from the fresh issue will be utilised towards partial or full repayment or prepayment and redemption of the
certain financial indebtedness of the Asset SPVs (special purpose vehicles) and the investment entity; and acquisition of stake and
redemption of debt securities in certain Asset SPVs, it added.
In the offer for sale (OFS), the selling unitholders do not currently own the units that are proposed to be offered in the offer as
part of the Offer for Sale, nor have any units been issued by us, the company informed in the DRHP.
These units will be issued to the selling unitholders after the bid/offer closing date and prior to the allotment of the units in the
offer in exchange for equity shares, compulsorily convertible debentures and redeemable preference shares held by the selling
unitholders in the relevant Asset SPVs and the investment entity.
A portion of the units is then proposed to be sold by the selling unitholders in the offer.
