Embassy gets Sebi’s approval to list REIT
Embassy REIT was registered in July last year—the first such realty trust in India to be accorded registration
Mumbai: Blackstone Group LP-backed Embassy Office Parks has received the approval of the Securities and Exchange Board of India (Sebi) for listing its real estate investment trust (REIT), through which it plans to raise ₹5,000 crore.
The company is likely to launch the REIT in the March quarter, said a person aware of the development.
An official with Embassy group confirmed the development but did not give details.
The Embassy Office Parks REIT was registered with the market regulator in July last year, making it the first such realty trust in India to be accorded registration. On 24 September, Embassy filed an offer document for the REIT listing. Embassy Office Parks is an investment partnership between Jitu Virwani-promoted Embassy Group and Blackstone, along with other stakeholders.
Around 33 million sq. ft of commercial office space, both owned by Blackstone as well as in partnership with Embassy group, has been placed under the REIT portfolio. Of the total, 24 million sq. ft is completed and 95% of this has already been leased. This includes 11 assets—seven office parks and four buildings located in Mumbai, Pune, Bengaluru and Noida. The annual rental income of the portfolio stands at ₹2,000 crore and is expected to go up by 50% in the next three years.
REITs are listed entities that invest in leased office and retail assets allowing developers to raise funds by selling completed buildings to investors. As in mutual fund, investors can make securitized real estate investments in small amounts.
Mint reported on 24 September that Mike Holland, chief executive officer (CEO) of Embassy Office Parks, would take over as CEO of the REIT. Vikaash Khdloya, who is managing director with the Blackstone Group, will be deputy chief executive and the chief operating officer.
The Embassy Office Parks REIT has been much awaited given that this would be India’s first REIT listing.
Despite the slump in the residential market, the commercial office sector has seen robust growth and foreign investments. According to property consultant JLL India, institutional investments in the real estate sector is likely to touch $5.5 billion in 2018, the highest since 2009. A large chunk of this investment is going into the commercial office space.
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