Embassy group may defer Reit listing till 2018

The wait for the country’s first real estate investment trust (Reit) could drag on with Embassy Office Parks, the joint venture between the Bengaluru-based Embassy group and the US-based Blackstone, considering deferring its plan for filing the draft red herring prospectus (DRHP) for its Reit listing till next year.
 
The venture was planning on filing the prospectus by the end of September and listing by November. The company was planning to raise Rs 6,000 crore through the issue. The venture is planning to dilute 25 per cent of the issue.
 
Reits are like mutual funds, units of which can be traded on exchanges.
 
“Embassy is discussing whether to file the DRHP this year or early next year. Blackstone is neutral about the timing,” said a source aware of the developments.
 
The source said some of the joint venture’s executives were of the view that if they filed the prospectus now and approval by the Securities and Exchange Board of India (Sebi) was granted in December the Reit would list in a month when most global investors and bankers took their annual vacation.
 
A mail sent to Embassy did not draw any response till the time of going to the press. Blackstone could not be reached for comments.
 
The Reit floated by the joint venture company was registered with Sebi in July.
 
“Most of the probable Reit candidates were waiting to see how the Embassy Reit issue fared. Now the wait has become longer,” said the managing director of a real estate company who did not wish to be named.
 
Embassy Office Parks has 20 million sq ft of office space in Bengaluru and other southern cities. Morgan Stanley is the banker for the issue.
 
Blackstone’s other joint venture partner, the Pune-based Panchshil, is also working on a Reit, though its progress could not be ascertained.

The Qatar Investment Authority-backed RMZ, the Mumbai-based K Raheja Corp, in which Blackstone has picked up a stake, and mall operator Phoenix Mills are among potential Reit players, according to sources.
 
There were around 900 Reit-worthy properties and close to 283 million sq ft of office space in the country that could be brought under such trusts, real estate consultant JLL had said earlier.
There were over 500 Reits operating across the world in 2016 with a cumulative market capitalisation of over $900 billion, estimates suggest.