Blackstone and Brookfield eye stake in Wadhwa's office portfolio in BKC

Wadhwa group, one of the largest owners of office property in the BKC area, plans to float a REIT after onboarding an investor

Global fund managers such as Blackstone and Brookfield are in talks with Mumbai-based Wadhwa Group to buy a stake in the key office portfolio of the realtor in Bandra-Kurla Complex (BKC), said sources.

The group, one of the largest owners of office property in the BKC area, plans to float a real estate investment trust (REIT) after on-boarding an investor, sources said.

The commercial property portfolio of the Wadhwas includes Platina, Trade Centre and The Capital, which together have a size of one million square feet. According to consultants, the portfolio could be valued at Rs 5,000 crore.

“We are in talks with various investors. We want to float a REIT at the right time,” said Vijay Wadhwa, chairman emeritus of the group.

Brookfield and Blackstone did not offer comments.

“Since it owns marquee assets in a place like BKC, it is good for investors,” said Shobhit Agarwal, managing director at Anarock Capital.

As an instrument, REIT is becoming popular among the owners of office assets. After the Blackstone-Embassy joint venture raised Rs 4,750 crore through this route, which was the country’s first REIT, other firms are also looking to float and list them. 

While another Blackstone-Raheja venture is gearing up for REITs, Bengaluru-based Salarpuria Sattva and Pune-based Panchshil, where Blackstone has invested, could also go for REITs, sources said. REITs are like mutual funds which are traded on exchanges. They are tax efficient as 90 per cent of the income is distributed as dividend.

Blackstone, which invested over $6 billion in commercial properties in India, is the biggest owner of office properties in the country with a portfolio of 115 million square feet.

Brookfield owns about 25 million square feet. Success of the first REIT in the country could lead to  100 million square feet office space getting listed in the short to medium term.   

The total REIT-worthy assets are around 302 million square feet, according to JLL Research, translating into a potential investment of $38.6 billion.