Mindspace REIT IPO to raise Rs 4,700 crore

Mumbai: Blackstone-backed Mindspace Business Parks REIT or Real Estate Investment Trust will launch its initial public offering (IPO) in the last week of July to raise about Rs 4,700 crore, said investment bankers aware of the development. Blackstone and K Raheja Corp will offload units worth Rs 3,700 crore and the REIT will sell fresh units of about Rs 1,000 core in the issue, they said. Mindspace would be the second REIT to list on Indian bourses.

Sponsored by K Raheja Corp, Mindspace has 29.5 million square feet leasable area spread across Mumbai, Pune, Hyderabad and Chennai.

The company has reported a 21 per cent jump in revenues at Rs 2,026 crore in FY20 over FY19. Profit for the year ended March 31, 2020 was flat at 514 crore. As on March 31, the total market value of its portfolio was Rs 23,675 crore. As of May, the committed occupancy of its portfolio stood at 92.4 per cent and average rent was 52.5 per sq ft.

Embassy Office Parks REIT, the only listed REIT in India, has returned 8 per cent since its listing on April 1, 2019 compared to the 9 per cent fall in the Nifty and the 25 per cent decline in the BSE Realty Index. On Thursday, the Embassy REIT closed at Rs 340 per unit on BSE.

Retail investors can apply to REIT units but with a minimum trading lot size of 50,000. Unlike equity investments, REITs provide assured returns to investors through compulsory dividend distribution. REITs must mandatorily distribute 90 per cent of the net distributable income as dividend. Further, there is a potential upside available to the investors based on periodic valuation of the property.