Property Share SM REIT IPO Opens Today: Offers Access to Prime Bangalore Office Space
Property Share Investment Trust, India's first registered small and medium Real Estate Investment Trust (SM REIT), launched its initial public offering (IPO) on December 2, 2024.
Property Share IPO Details
- The IPO is expected to close on December 4, 2024, with shares being allotted on December 5 and listed on December 9.
- The IPO aims to raise ₹ 352.91 crore through a fresh issue of 3,361 units.
- The price band for the IPO has been fixed at ₹ 10 lakh to ₹ 10.5 lakh per unit.
- ICICI Securities is the sole lead manager to the offer, and KFin Technologies is the registrar.
Utilization of IPO Proceeds
The proceeds from the IPO will be used to acquire Prestige Tech Platina, a LEED Gold-certified office building in Bangalore, and for general purposes. The property comprises 246,935 square feet of office space located on Outer Ring Road (ORR). The entire property will be leased to 7.ai Inc., a US-based tech company, under a new nine-year lease agreement.
Property Share Overview
The IPO is for PropShare Platina, which is the first scheme under Property Share Investment Trust (PSIT). Small and medium REITs are a new asset class regulated by the Securities and Exchange Board of India (SEBI). SM REITs can raise between ₹ 50 and ₹ 500 crore, which is smaller than regular REITs, which must be above ₹ 500 crore. SM REITs also typically invest in specific properties, while regular REITs invest in a basket of properties.
The scheme is exclusively available to Qualified Institutional Buyers (QIBs) and Non-Institutional Investors (NIIs), offering them a projected distribution yield of 9% for the financial year 2026 (FY26). Outer Ring Road is the largest office market in Bangalore, housing offices of many multinational companies. To make the offering more appealing, Property Share Investment Manager has waived off all annual management expenses for FY25 and FY26. In FY27, they will charge a nominal fee of 0.25%, and from FY28 onwards, the fee will be 0.3%. Property Share will also invest at least 5% of the scheme's units or ₹ 17.6 crore from its capital into the offering as the investment manager's contribution. The IPO is entirely a fresh issue of Platina units, with no offer for sale component.