Brookfield REIT IPO subscribed 77% on day 2

Mumbai: The initial public offer (IPO) of Brookfield REIT - Brookfield India Real Estate Trust - was subscribed 77% on Thursday, the second day of bidding.

The Brookfield REIT offer received bids for 5.88 crore units against the IPO size of 7.62 crore units, according to the data available on the exchanges.

The Qualified institutional investor portion was subscribed 54%, and that of Non- institutional investors was subscribed 1.05 times.

The REIT owns a portfolio of four large campus-format office parks, located in Mumbai, Gurugram, Noida and Kolkata. The portfolio totals 14.0 million square feet (msf) comprising 10.3 msf of completed area, 0.1 msf of under construction area and 3.7 msf of future development potential.

"At the higher price band of ₹275 per share, Brookfield REIT's unit is valued at 88.4% of its net asset value (NAV), as compared to peer average of 96.9%. Thus the issue is fairly priced," Choice Broking said.

"Since technology companies account for around 50% of the leased area of existing portfolio and considering their positive outlook (technology sector), we don't think there will be any concerns on future tenancy. Based on the projected distribution schedule, pre-tax yield would remain in the range of 8-8.5% in FY2023 estimates. "With interest rate at lower levels in the economy, the projected yield from this REIT seems to be attractive. Thus considering the above observations, we assign a 'subscribe for long term' rating for the issue," the brokerage added.