Knowledge Realty Trust (KRT), backed by Sattva Group and Blackstone, filed initial documents with SEBI to launch its first REIT public offering, raising more than Rs 6,200 crore.
KRT has filed the Draft Red Herring Prospectus (DRHP) with SEBI to launch an Initial Public Offering (IPO) and list the REIT on stock exchanges as part of its strategy to monetize its 30 prime office assets in major cities.
KRT will be India's largest REIT in terms of Net Operating Income (NOI) and Gross Asset Value, estimated to be around Rs 60,000 crore.
KRT intends to raise approximately Rs 6,200 crore through REIT-IPO, according to its DRHP.
There are currently four listed REITs in India: Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, and Nexus Select Trust.
Aside from Nexus Select Trust, the other three REITs are supported by rent-yielding office properties. Nexus has a large portfolio of retail real estate properties.
This will be the fifth public listing of Blackstone India Real Estate, following three listed REITs and one for Ventive Hospitality.
KRT's total portfolio of 48 million sq ft (37 million square feet completed) includes 30 Grade A office assets in six major cities, making it India's most geographically diverse Office REIT.
90% of the portfolio is leased to marquee tenants, including 76% MNCs and 45% GCCs (Global Capability Centres).
Sattva Developers has already built 74 million square feet in seven Indian cities across commercial, residential, co-living, co-working, hospitality, and data center sectors. An additional 75 million square feet is being planned and implemented.
Blackstone, a leading global investment firm, has significant exposure to the Indian real estate market.
The two sponsors have decided to pursue a brand-neutral strategy to grow the KRT portfolio inorganically through third-party acquisitions.
The current four REITs have a combined portfolio of more than 126 million square feet of Grade A office and retail space across the country. Since their inception, these REITs have collectively distributed more than Rs21,000 crore to unit holders.
"The REIT market in India is rapidly expanding, thanks to active participation from large developers and investors. According to Vestian CEO Shrinivas Rao, the listing of the new REIT will increase liquidity in the real estate sector by allowing more retail investors to participate.
REITs are an essential investment tool for diversifying investor portfolios and generating consistent income, he stated.
According to Vestian's most recent report, nearly 60% of pan-India office stock is REIT-worthy in the top seven cities.
"As the regulatory environment matures, India is expected to see an increase in REIT listings, as well as expansion into new real estate segments. A favorable regulatory environment, higher returns on investment, and a rapidly expanding office market are expected to boost the REITs market in India," Rao said.
