Brookfield launches Rs 3,800-cr IPO for its real estate investment trust

Mumbai, Jan 29th (PTI) Alternative asset manager Brookfield announced on Friday that it has launched an initial public offering of Rs.3,800 billion (IPO) for its Real Estate Investment Trust (REIT), which will give investors a stake of over $ 1.4 billion. Square feet of its commercial real estate throughout the company is what the land allows for.

With the IPO amid the COVID-19 pandemic, the global wealth manager stated that there is no data to suggest that working from home is the new normal and shining confidence that benefits like working closely together for productivity purposes are ultimately result in teams working from offices.

REITs are a relatively newer platform in India and two REITs have been listed so far.

The issue will open for subscription on February 3rd and close on February 5th. Bids can be submitted for at least 200 shares and then in multiples of 200 by other bidders as anchor investors.

Investors will be able to buy a unit of the REIT in the 274-275 rupees range, with confidence valued at the high end of the band at 8,327 rupees, said Ankur Gupta, managing partner of Real Estate, adding, That the net worth of the asset (NAV) per unit is Rs 311.

Gupta said hybrid models for working from home or outside of the office were in place before the pandemic, adding that “when the economy hits all cylinders,” we need to see how efficiently we deliver services and products “he remarked.

“As long as the economy is doing well, commercial real estate has a very strong reason to do well,” he told reporters in a virtual press conference ahead of the IPO.

He admitted tenants wanted to cement their presence very early in the pandemic, and said the leasing outlook is now robust.

Brookfield is offering 1.4 crore square feet of its portfolio in the REIT and is proposing to reduce its stake to 54 percent post-issue. The proceeds from the issue will be used for deleveraging, Gupta said.

The REIT is looking for an additional 1.5 square feet over the next few years, and investors in the REIT will receive returns in the form of dividends from long-term commercial property rentals.

Much of the commercial real estate is buildings rented to tech, finance, financial technology, media and other service companies, especially multinational corporations, for long-term leases, Gupta said, adding that they are currently over 90 percent occupied.

All properties have gone through the lockdown, collections were over 98 percent and 5 lakh square feet of space were re-let during the pandemic, he said, adding that there is a 16 lakh square foot lease pipeline that is open to prospective buyers are switched on.

Bank of America President and Country Head Kaku Nakase, one of the lead managers, said this was the first REIT in Asia for Brookfield, adding that the pandemic had made India more important to multinational corporations. PTI AA DRR DRR

Disclaimer: – This story was not edited by Outlook staff and is automatically generated from news agency feeds. Source: PTI

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