(Commonwealth) _ Nexus Select Trust, a real estate investment trust (REIT) sponsored by Blackstone, is set to undertake an initial public offering (IPO) in early May to raise Rs 4,000 crore. The REIT, which owns a portfolio of commercial properties across India, is expected to be one of the largest IPOs in the country’s real estate sector.
REITs are a popular investment vehicle for real estate, enabling investors to invest in a portfolio of income-generating properties, such as office buildings and shopping centers. They offer several advantages over traditional real estate investment, including diversification, liquidity, and tax benefits.
Nexus Select Trust, which was launched in 2019, owns a portfolio of nine commercial properties across India, including office buildings in Mumbai and Gurugram, a shopping mall in Bengaluru, and a warehouse in Chennai. The portfolio has a total area of over 7 million square feet and is valued at around Rs 11,000 crore.
The IPO will enable the REIT to raise funds to pay off its existing debt and acquire new properties. It will also provide an exit opportunity for Blackstone, which owns a 90% stake in the REIT. The remaining 10% is owned by Embassy Group, one of India’s leading real estate developers. The REIT has already received regulatory approval for the IPO from the Securities and Exchange Board of India (SEBI) and has appointed several banks, including Axis Capital, Kotak Mahindra Capital, and Morgan Stanley, as lead managers for the offering.
The IPO comes at a time when the Indian real estate sector is showing signs of recovery, following a period of slowdown and consolidation. The sector has been buoyed by several government initiatives, including the Real Estate Regulatory Authority (RERA) and the Goods and Services Tax (GST), which have helped to increase transparency and reduce costs.
Moreover, the sector has been a beneficiary of the ongoing shift towards remote work, with companies increasingly looking to downsize their office space and adopt flexible working arrangements. This has created opportunities for REITs, which can offer tenants a range of office solutions, from traditional leases to co-working spaces.
