Mindspace Business Parks REIT, owned by the K Raheja Group and Blackstone, will raise Rs 4,500 Crore in the public issue. Other strategic investors, including Capital Group, GIC Group, Fidelity Group and Fullerton, who have committed themselves to take part, will collect Rs 1,125 crore from their business.

Mindspace Business Parks REIT to Hit the Capital market 

India 's second REIT would get Rs 4,500 crore through a fresh issue of Rs 1,000 crore and a Rs 3,500 crore bid. The issue will start on July 27 and end on July 29.

In accordance with an offer document filed with the Securities & Board of India ( SEBI), Total REIT units proposed to be subscribed by strategic investors, would be attributable to Rs 275 per piece of 4,09 Crore. In addition to K Raheja Corp, US private equity major Blackstone Group is also a stakeholder in the company and will dilute their respective holdings in this matter.

The response from Mindspace REIT 's strategic investors indicates continued demand for Indian commercial real estate quality by worldwide investors. High dividend returns at lower interest rates make REITs an attractive investable asset class as well as capital growth. India's largest REIT so far offered 22% returns, including distribution and a 14% price rise since its listing last year.

Mindspace REITs Assets

The portfolio of Mindspace REITs includes a total leasable area of 29.5 million square feet with five integrated business parks and five different offices across Mumbai Metropolitan Region (MMR), Pune, Hyderabad and Chennai offices. As of March 31, 2020, it comprises 23 million sq ft of completed area, 2.8 million sq ft under construction and 3.6 million sq ft future development space.

Since April 1, it has leased a further 7 lakh square feet to tenants including pre-committed 42,567 sq.ft area in its ongoing properties at Chennai. The rents received from these new leases are higher than the average surrounding market renting. According to the updated filing of the SEBI, 3.3 million new offices have been completed since last year's predecessor.

However, during the lockdown times, for April and May 2020, the company received 97.8% and 95.2% of its gross contractual rentals It reported a net profit of Rs 513.9 crore from its total income of Rs 2,026.2 crore for the year ended March.

Investors would benefit from a multi-decade commercial real estate growth phase as India progresses like other most developed countries.

By: Shailaja K