More Blackstone joint ventures to hit real estate investment trust market

After the public issue of the real estate investment trust (Reit) from Embassy Office Parks, a joint venture (JVs) between Blackstone and Embassy, other Blackstone JVs have started or would start the work on their Reits soon, sources said.

The rental arm of Mumbai-based K Raheja Corp, where Blackstone holds 15 per cent stake, has begun work on the Reit and appointed Morgan Stanley the banker, say sources. The Raheja company is expected to file papers for the Reit in the next six months, sources said. It has an office portfolio of a little over 20 mn sq ft.  Recently, it emerged the finalist to buy the former headquarters of Citibank in the BKC area of this city. 

An e-mail sent to Raheja Corp did not elicit a response. A Reit is an investment tool that owns and operates rent-yielding real estate assets. It allows individual investors to make investments in this platform and earn income. 

Bengaluru-based property developer Salarpuria Sattva has set up a JV with Blackstone to buy and develop commercial assets. It will also start work on a Reit early next year, said sources. The JV has a portfolio of 16 mn sq ft in Hyderabad and is looking to buy properties in Bengaluru. 

The Salarpuria Sattva management could not be communicated with. Blackstone did not respond to queries on the subject. “They want to have a big chunk of properties before going for a Reit,” sources said. 

Another JV of Blackstone, with Panchshil, could also go for a Reit, it appears. Details could not be had. 

The Reit of Embassy Office Parks raised Rs 4,750 crore through a public issue of units this year and Rs 3,000 crore via debentures. It was the first public issue of Reit units in this country. “The success of the Embassy Reit would inspire other companies with a commercial portfolio to explore this option,” said Shobhit Agarwal, managing director at Anarock Capital.

The country has around $35 billion (Rs 2.5 trillion) worth of office spaces that are eligible to be listed under a Reit, according to property consultant JLL.