Blackstone-Sattva JV file draft Papers for Rs 6,200 crore Reit IPO

This will be India's biggest and Asia's second-largest Reit IPO

US-based private equity firm Blackstone and Bengaluru-based real estate developer Sattva Group filed the draft initial public offer (IPO) papers for India’s biggest real estate investment trust (Reit) named Knowledge Realty Trust to raise ₹6,200 crore.

 

The Reit will be the largest in India in terms of net operating income (NOI) and gross assets value (GAV). Blackstone will hold 55 per cent in the Reit, while Sattva will hold the rest. The draft red herring prospectus (DRHP) did not reveal the timing of the listing.

 

Post-listing, Knowledge Realty Trust will be India’s fifth-listed Reit. It will have a total leasable area of 48 million square feet, the second largest in Asia, according to the details shared in the draft papers.  

 

According to the document, 95 per cent of Reit's assets are concentrated in the top three Indian office markets - Mumbai, Bengaluru, and Hyderabad - and 90 per cent of Reit's portfolio is leased, with 76 per cent of the tenants being multinational companies. Some of the properties included in the Reit are One BKC, One International Centre, and One World Centre in Mumbai. 

 

Of the total issue size of ₹6,200 crore, ₹5,800 crore will be used for partial or full repayment of outstanding debt or prepayment of debt of some asset special purpose vehicles and the investment entities, which stands at Rs 20,197 crore as of September 30, 2024. Of this, the total amount of outstanding loans availed by the Asset SPVs from banks and NBFCs, was Rs 19,901 crore.     

 

As of September 30, 2024, the value of Blackstone's global real estate portfolio stands at around $602 billion. Earlier, Blackstone exited from Embassy Office Parks REIT in December 2023, selling its entire stake of 23.5 per cent for ₹7,100 crore, generating a 3-3.5x return on its initial investment. In 2022, Blackstone also exited from Mindspace Business Parks REIT by selling its entire stake of ₹9.16 per cent for ₹1,740 crore, a 16 per cent premium. 

 

Last year, the firm sold its partial stake of 20.8 per cent in Nexus Select Trust for more than ₹4,300 crore. 

 

Sattva Group has developed over 80 million square feet so far and has 65 million square feet of development coming up. The realtor operates in commercial as well as residential real estate across Bengaluru, Goa, Pune, Hyderabad, and Coimbatore.