Nexus REIT intends to launch a ₹4000 crore initial public offering in May.
Global private equity major Blackstone Group-sponsored Nexus Select Trust REIT, India’s maiden real estate investment trust (REIT) with retail properties, is set to launch its initial public offering to raise over Rs 4,000 crore in the first week of May, said persons with direct knowledge of the development.
This will be Blackstone’s third REIT in the country, including both of the earlier trusts that housed office properties. Embassy REIT, backed by an institutional investor, was India’s first REIT and made its public market debut in 2019, while Mindspace REIT listed in 2021.
“The DRHP (draft red-herring prospectus) for the Nexus REIT was filed in mid-November, and the process is underway to file the offer document by mid-April in the next few days… the total asset value of the portfolio is estimated to be over $3 billion,” said one of the persons mentioned above.
Nexus Select Trust has a portfolio of 17 operational shopping malls across 14 major cities in India, covering 10 million sq ft of retail space. These properties are in cities including Delhi, Bengaluru, Navi Mumbai, Chandigarh, Chennai and Hyderabad that collectively represent 30% of the country’s discretionary retail spending and have seen strong population growth.
The retail portfolio, with over 3,000 stores, has a total occupancy rate of 95% and witnesses an annual footfall of over 130 million shoppers, according to the DRHP.
ET was the first to report that this retail REIT portfolio will include south Delhi’s Select Citywalk Mall. The proposed REIT portfolio will also include the global institutional investors’ recent acquisition of Prestige Group’s commercial assets, including malls in Bengaluru, Chennai and Hyderabad.
Some of the other retail assets that will be part of the REIT include Elante, Ahmedabad One, Nexus Koramangala and Seawoods Grand Central, which are located across key cities.
Morgan Stanley, JP Morgan, Kotak Mahindra Capital, Axis Capital and BoA ML are the bankers for the proposed public issue.
India is one of the fastest growing economies in the world, led by the growing middle-class population and rapid urbanisation. This is driving a robust trend in consumption, which makes up nearly 60% of India’s gross domestic product (GDP).
The global investor is looking at listing its retail assets’ REIT against the backdrop of rising consumption levels, favourable demographics, and the increasing presence of aspirational brands in the country.
Blackstone declined to comment on the story.
The Indian retail market is underpenetrated, with only 13% organised retail as opposed to around 86% in the US.
Blackstone has emerged as the most aggressive institutional investor in India, with overall assets under management estimated to be $60 billion across various sectors, making it one of the top 10 business groups in the country. Real estate accounts for nearly $22 billion of this market value across over 40 investments.
The US private equity major is the largest office owner in India, with an office portfolio of over 130 million sq ft across 38 assets in seven cities. Of this, around 13 million sq ft offices are under construction and 16 million sq ft is future development. It has created the Nucleus Office Parks platform with 25 million square feet for hosting 100% owned commercial assets.
Blackstone additionally owns 35.5 million square feet of logistics space under Horizon Industrial Parks portfolio and Greenbase Industrial and Logistics Park.
REIT is an investment trust that owns, manages, and operates income-producing real estate assets. It allows individual investors to make an investment in this platform and earn income in the form of rental yield and appreciation in the capital value of the property.
