Blackstone, Karnataka minister to bring assets under Embassy REIT

U S based private equity firm Blackstone and Karnataka IT & BT minister KJ George would bring some of their assets in the proposed real estate investment trust or REIT to be floated by Blackstone-Embassy joint venture, said sources in the know.

The JV company Embassy Office Parks’ plan to submit application for REIT was delayed as George was undecided on bringing his share in Embassy Golf Links (EGL), a 4.5 million square feet information technology park in Bengaluru, under the REIT.

The property is a 50:50 JV between Embassy Office Parks and George’s Kelachandra group.

According to sources, the minister has made up his mind on bringing his share under the REIT now. He could not be contacted for this article.

The JV will file its draft prospectus for REIT next month, said sources. The REIT, which will be the country's first REIT offering and is expected to raise $ 1 billion from investors. 

MAKING OF A REIT 

* The Embassy-Blackstone JV will file its draft prospectus for REIT next month

* It will be the country's first REIT ; expected to raise $ 1 billion from investors.

* The JV has a portfolio of 23 mn sq ft and has a potential to develop another 10 million sq ft. 

* Has properties such as Embassy Golf Links, Embassy Manyata Tech park, Embassy Tech Village

* In July 2017, Embassy REIT was registered with Sebi

Embassy Office Parks has a portfolio of 23 million sq ft and has a potential to develop another 10 million sq ft. It has properties such as Embassy Golf Links, Embassy Manyata Tech park, Embassy Tech Village In Bengaluru and Embassy Tech Zone in Pune among others.

“Blackstone is also looking to bring some of its assets in REIT," said the sources without specifying which assets it would bring under the REIT. 

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A mail sent to Embassy chairman Jitu Virwani did not elicit any response. Blackstone declined to comment on the matter. In July 2017, Embassy Office Parks REIT was registered with the Securities and Exchange Board of India (Sebi).

Blackstone is selling some of its assets in Pune and NCR . However, it is not known whether Blackstone is looking to bring them under the REIT.

According to experts, the Blackstone-Embassy REIT would test the market for REITs in the country. Many aspirants such as K Raheja Corp, RMZ, Prestige and others are looking at the success of the first REIT, said experts. 

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 Sebi had notified REITs and InvITs Regulations in 2014, allowing setting up and listing of such trusts which are very popular in some advanced markets. 
 

However, only two InvITs - IRB InvIT Fund and Indiagrid Trust - have got listed on stock exchanges so far and not a single REIT has been listed in the country.
 

Last week, financial services firm IIFL Holdings said it has registered a real estate investment trust (REIT) with the markets regulator Sebi.