The Real Estate Investment Trust (REIT) market is highly evolved in countries like Singapore and the UAE. Other countries, including India, are slowly warming up to the idea of REITs and their return potential.
Brookfield India Real Estate Trust, India’s only institutionally managed public commercial real estate company, has announced the launch of an IPO on February 03, 2021. This will be open for subscription until February 05, 2021. Here is all you need to know about the issue.
Please note: You will not be able to invest in this IPO on Groww via UPI. You can invest in the IPO via the ASBA facility– available via the net banking interface of your bank account. Almost all banks offer this facility.
|IPO Date||February 03, 2021 to February 05, 2021|
|Issue Type||Book Built Issue IPO|
|Issue Size||Equity Shares of Rs.10 totaling up to Rs.3,800 Crore|
|Fresh Issue||Equity Shares of Rs.10 totaling up to Rs.3,800 Crore|
|Face Value||Rs.10 per equity share|
|IPO Price||Rs.274 to Rs.275 per equity share|
|Market Lot||200 shares|
|Min Order Quantity||200 shares|
|Listing At||BSE, NSE|
|Bid/Offer Launch date||February 03, 2021|
|Bid/Offer Last date||February 05, 2021|
|Basis of Allotment finalization date||February 11, 2021|
|Initiation of Refunds||February 12, 2021|
|Credit of Shares to Demat Account||February 12, 2021|
|IPO Shares Listing Date||February 17, 2021|
Brookfield India Real Estate Trust is India’s only institutionally managed public commercial real estate trust. Brookfield Asset Management, one of the world’s largest alternative asset managers, is the promoter of this trust. Brookfield India endeavors to be the leading owner of high-quality income-producing commercial real estate assets in key gateway Indian markets, which have significant barriers to entry.
The REIT is being launched based on studies that suggest that by 2030, around 90 million more people will be added to the workforce increasing the demand for office spaces and boosting the commercial real estate sector in the country.
This Initial Portfolio of Brookfield India consists of four large campus-format office parks, located in some of India’s key gateway markets – Mumbai, Gurugram, Noida, and Kolkata. The Portfolio totals 14.0 msf, comprising 9.8 msf of Completed Area, 0.6 msf of Under Construction Area, and 3.6 msf of Future Development Potential. The completed area of the Portfolio is 96% occupied and leased to marquee tenants with 75% of Gross Contracted Rentals contracted with multinational corporations such as Barclays, Bank of America Continuum, RBS, Accenture, Tata Consultancy Services, and Cognizant.
The REIT also has a 6.8-year Weighted Average Lease Expiry (WALE) that ensures a steady flow of cash. Further, it is positioned to grow organically through a combination of contractual lease escalations, 38% mark-to-market headroom to in-place rents, and near-term completion of the Under Construction Area to meet tenants’ expansion needs. Brookfield India is one of the largest landlords in each of its micro-markets, allowing the Manager to create significant efficiencies in asset management, operations, and tenant offerings. For its Initial Portfolio, the Manager has:
Here is a quick look at the financial performance of Brookfield India Real Estate Trust over the last three years:
|Profit After Tax||15.12||-15.75||161.01|
All amounts in INR Crore
A quick glance at the financial performance of Brookfield India REIT over the last three years highlights the fact that there has been a steady growth in revenue. During this period, the total income of the company showed growth at a CAGR of 4.25%. The assets of the company grew at a CAGR of 3.20%. Also, if you look at the profitability of the company, Brookfield India suffered losses in 2019. However, it has managed to reverse this trend in 2020.
Between 2017 and 2019, India was one of the fastest-growing economies in the world. The real estate sector is one of the important sectors of the Indian economy because of its multiplier effect. An impact on this sector has a direct bearing on the economic growth of the country. In India, most of the demand for commercial spaces is from multinational corporates from the US and Europe. Also, commercial rents have grown at a CAGR of 5% over the last five years.
Over the last decade, the office real estate landscape of India has evolved from single standalone buildings to large modern corporate IT parks with the latest amenities. Multinational tenants display a strong preference for campus developments for a better employee experience. Hence, such campuses operate at lower vacancies. The top seven Indian markets of Chennai, Mumbai, Pune, Hyderabad, Bengaluru, NCR, and Kolkata have seen such campuses grow at a CAGR of 11% between 2008 and Q1 of 2020.
Here is a quick look at the performance of Brookfield India in comparison to its peers on some key aspects (the financial year 2019) (all amounts in Rs. Crore):
|Total Income||Profit After Tax|
|Brookfield India REIT||981.40||15.15|
|Embassy Office Parks REIT||2243.96||648.60|
|Mindspace Business Parks REIT||2026.20||513.9|
As you can see above, Brookfield India is a medium-sized company in the REIT segment. Embassy Parks had launched an IPO in 2019 and Mindspace Business Parks in 2020.
Brookfield India Real Estate Trust proposes to utilize the net proceeds from the fresh issue for partial or full prepayment or scheduled repayment of the existing indebtedness of its Asset SPVs and general corporate purposes.
Promoters of Brookfield India Real Estate Trust IPO
Here are some things that you need to keep in mind before investing in the Stove Kraft IPO:
The Brookfield India Real Estate Trust IPO is a Main Board REIT IPO for the issue of equity shares having the face value of Rs.10 totaling up to Rs.3,800 crores. The registrar for the IPO is Link Intime India Private Limited and the shares are proposed to be listed on the BSE and NSE.
The Brookfield India Real Estate Trust IPO opens on February 03, 2021, and closes on February 05, 2021.
The lot size for the Brookfield India REIT IPO is 200 shares and the minimum order quantity is 200 shares.
For the Brookfield India REIT IPO, the allotment will be finalized by February 11, 2021. Further, the shares are expected to be credited to investors’ accounts by February 12, 2021.