Blackstone, Sattva file for ₹6,200 cr REIT issue

Global asset manager Blackstone and Indian real estate developer Sattva have filed the draft prospectus for a real estate investment trust to raise ₹6,200 crore (about $712 million) with a commercial portfolio of 48 million square feet, of which 37 msf is completed.,

Sources said the REIT will raise anything in the range of ₹5,700-7,500 crore.

Called Knowledge Realty Trust it will be the largest office REIT in the country based on the gross asset value of ₹59,445 crore and net operating income of ₹1,632.4 crore in the first half of FY25, the prospectus said.

Blackstone holds 55 per cent stake in the venture and the remainder is held by Sattva.

The portfolio consists of 30 office assets in six cities, with a committed occupancy of 89.9 per cent. The properties are 90 per cent leased with marque tenants, of which 76 per cent are multinationals and 45 per cent Global Capability Centres.

Of the issue’s total proceeds, ₹5,800 crore will be used to partially or fully repay some debts of the asset special purpose vehicles and investment entities and the remainder for general corporate purposes.

Some well-known properties owned by the venture include One BKC in Mumbai, Sattva Knowledge City in Hyderabad, Sattva Horizon in Bengaluru, One Unity Centre in Mumbai and Kosmo One in Chennai.

The net operating income has a growth potential of 18 per cent the next two years while the properties have a mark-to-market upside potential of 15 per cent. The venture also has a pipeline of 7.5 msf under right of first offer, while the weighted average lease expiry is 8.6 per cent, which gives it stability in lease rentals.

This is Blackstone’s third office REIT in India after Embassy Office Parks and Mindspace Business Parks. It also sponsors Nexus Select Trust, the only retail-focused REIT in the country.