This will be India’s first REIT IPO backed by rent-yielding retail real estate assets; at present, there are three listed REITs on stock exchanges but all backed by office assets
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Global investment firm Blackstone-sponsored Nexus Select Trust will hit the capital market on May 9 to raise up to Rs 3,200 crore through its retail REIT initial public offering (IPO). This will be India’s first REIT (Real Estate Investment Trust) IPO backed by rent-yielding retail real estate assets. At present, there are three listed REITs on stock exchanges but all backed by office assets.
Nexus Selct Trust has filed its offer document with market regulator SEBI for its IPO. According to the offer document, the total size of the public issue is Rs 3,200 crore, which includes fresh issue of units worth up to Rs 1,400 crore and offer for sale (OFS) of up to Rs 1,800 crore.
Earlier, the company had planned to raise up to Rs 4,000 crore from its proposed REIT public issue.
In November last year, Nexus Select Trust filed the draft red herring prospectus (DRHP) with Sebi to launch its retail REIT public issue.
Nexus Select Trust has a portfolio of 17 operational shopping malls across 14 major cities, covering a 9.8 million square feet area.
This will be the third REIT sponsored by Blackstone.
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It launched India’s first REIT Embassy Office Parks 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 of these are leased office assets.
In its portfolio of 9.8 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 across 17 shopping malls while the number of brands is nearly 1,100.
On the proposed retail REIT, Gagan Randev, Executive Director, India Sotheby’s International Realty, noted that the retail sector in India has shown remarkable resilience and steady growth, post the COVID pandemic.
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“a retail REIT, individual and institutional investors can benefit from the stability and long-term potential of the retail sector,” he said.
At the same time, Randev said the investors will be able to spread their risk across a diversified portfolio of real estate.
