Blackstone Group and its Indian partner Embassy Group set a tentative yield for their initial public offering (IPO) of the first real estate investment trust (REIT) in India, which could raise about $723m, according to a report by Bloomberg.
Blackstone and Embassy reportedly plan to approach investors with an annual yield of around 6.5-7.0%, and they are considering marketing the deal with a total return of 14-16%, which takes into account factors like asset value appreciation and rental increases in addition to yield.
The firms filed a draft offer document for Embassy Office Parks REIT public issue, which will hold more than 300bn Rupees ($4.1bn) of assets, with the Indian capital markets regulator on Monday 24th of September. The REIT portfolio will include about 33m sq ft of real estate, including 24m sq ft of completed projects and another 3m sq ft under development, the report said.
Blackstone is pursuing India’s first REIT as the South Asian country’s cash-starved property firms continue to recover from sweeping policy changes and struggle to access liquidity. The REIT listing would also be an important test after much-hyped infrastructure trusts failed to gain traction in India.
