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Blackstone-backed Nexus Select Trust is set to hit the Street next week with the initial public offering (IPO) on Tuesday. The total size of the REIT IPO is Rs 3,200 crore, comprising fresh issue and offer for sale (OFS).
Of the total IPO size, Rs 1,400 crore will be the fresh issuance of units, and remaining Rs 1,800 crore will be an offer for sale (OFS) of units, company executives told reporters.
However, earlier company had plans to raise up to Rs 4,000 crore from its proposed REIT public issue. The lower and upper price band of the IPO is fixed at Rs 95 per unit and Rs 100 per unit.
Bids can be made for a minimum of 150 units and in multiples of 150 units thereafter by bidders other than anchor investors.
The IPO's book-running lead managers are --- BofA Securities India, Axis Capital, Citigroup Global Markets India, HSBC Securities and Capital Markets (India), IIFL Securities, JM Financial, J.P. Morgan India, Kotak Mahindra Capital, Morgan Stanley India Company, and SBI Capital Markets.
Post-IPO, the shareholding of Blackstone in Nexus Select Trust will come down to 43 per cent from 60 per cent. Select City Walk promoters stake will reduce slightly to 24.3 per cent from 25 per cent.
At present, the Nexus Select Trust portfolio consists of 17 best-in-class Grade A urban consumption centres (retail spaces) with a total leasable area of 9.8 million square feet, two complementary hotel assets (354 keys) and three office assets (1.3 million sq ft). The company also acquired seven assets from the Prestige group during Covid-19 pandemic.
Nexus' assets are located across 14 leading cities in India, which constituted 30 per cent of India’s total discretionary retail spending in FY20. Firm’s executives said that the portfolio is valued at around Rs 23,000 crore.
The Nexus Select Trust has a retail portfolio of over 3,000 stores, a total occupancy rate of 95 per cent and an annual footfall of over 130 million shoppers.
Witnessing retail consumption growth in the country, It is further planning to acquire more assets and will further expand its portfolio through inorganic routes, company executives told reporters.
"Since establishing the platform in 2016, we have acquired 17 high quality retail assets. We have acquired 1.4 million square feet of retail space every year and we will continue with the same pace," said Nirzar Jain, chief leasing officer, Nexus Select Trust.
According to the company, the REIT's portfolio has a tenant base of 1,044 domestic and international brands with 2,893 stores as of December 31, 2022, and is well diversified across cities with no single asset and tenant contributing more than 18.3 per cent and 2.8 per cent of its total Gross Rentals for the month of December 31, 2022, respectively.
Earlier, company executives have said that the portfolio’s total net operating income is projected to grow organically by 27 per cent between FY23E and FY25E (12.6 per cent CAGR).
However, Projected net operating income at the Nexus Select Group (on a combined basis) for FY23 was Rs 1,414 crore, surpassing the projection for that year in the first nine months of the last financial year.
Nexus Select Trust which owns India's largest portfolio of consumption centres is backed by the American alternative investment management company, Blackstone.
Indian REITs have significantly outperformed global peers, delivering an internal rate of return (IRR) of 13.4 per cent since April 2019, outperforming US office REITs by 2,662 bps.
Currently, all the three listed REITs in the Indian market are office REITs. As such, there is currently no listed retail REIT in India. This will be the third REIT sponsored by Blackstone. It launched India's first REIT Embassy Office Parks in 2019 and Mindspace REIT in 2021.
