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Blackstone-Embassy to launch India's first REIT on Mar 18 to raise up to Rs 4,750 cr

Press Trust of India  |  New Delhi 

Global investment company and realty firm Embassy will hit the capital market with the country's first investment trust (REIT) to raise up to 4,750 crore, while it has received 876-crore commitment from strategic investors.

Embassy Office Parks, joint venture of and Embassy, has entered into unit subscription agreements with strategic investors to allot them 2,92,08,800 units for 876.3 crore.

These investors are American Funds Insurance Series, New World Fund INC and SMALLCAP World Fund Inc, according to a regulatory filing.

The issue will open on March 18 with a price band of Rs 299-300 per unit. The issue closes on March 20. The total issue size is 12,95,56,000 units.

had in September last year filed the draft red herring prospectus (DRHP) with market regulator Sebi to launch REIT, touted as Asia's largest in terms of portfolio size of 33 million sq ft.

is an that owns and operates rent-yielding assets. It allows individual investors to make investment in this platform and earn income. Sebi had notified REIT's regulations in 2014, allowing setting up and listing of such trusts, which are popular in some advanced markets.

"We will launch our in few weeks," had told on February 24.

"We already have a strong book of anchor and strategic investors. The REIT will be successful as in other countries and will set a precedent for the REIT in India," he had said.

Banking sources had earlier said the internal rate of return (IRR) for unit holders is expected at around 9 per cent in the first year and about 18 per cent in a five-year horizon.

Embassy Office Parks, a leading player in commercial real estate, has put 33 million sq ft of office and hospitality assets under its proposed REIT comprising of seven business parks and four city-centric buildings spread across Mumbai, Bengaluru, and

Out of the 33 million sq ft, about 24 million sq ft area is operational at 95 per cent occupancy and yielding rental income of over Rs 2,000 crore annually. Another 3 million sq ft area is under construction and 6 million sq ft area in pipeline.

Embassy Office Parks' rental income is expected to rise by 55 per cent in the next three years as it expects to lease area at a higher rent.

The JV firm has top MNC clients in its commercial projects. More than 50 per cent of the rents come from Fortune 500 companies. Clients such as Microsoft, Google, Wells Fargo and have their base in the office parks.

Unlike the housing segment, the commercial sector is doing well and attracting huge investments from domestic and global investment firms. Rising demand for co-working space is also fuelling demand for office properties.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, March 12 2019. 19:49 IST