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On the final day of subscription, last week, the Nexus Select Trust's IPO, which is the first REIT supported by retail real estate that yields rent, was subscribed 5.45 times. According to information provided by the NSE, the offer to sell shares worth Rs 3,200 crore received a substantial response, with bids placed for 101.03 crore units compared to the 18.52 crore units available for sale.
The segment allotted for individuals received a great response, with 6.23 times more subscriptions than available. Meanwhile, the portion set aside for qualified institutional buyers (QIBs) received 4.81 times more subscriptions than its quota. Nexus Select Trust garnered an impressive sum of Rs 1,440 crore from initial investors last week. The REIT is financially backed by Blackstone.
This response is remarkable considering the high levels of unpredictability present in the market. Over the past year, the IPO of Nexus REIT ranked second in size.
The proposal included a new offering of units worth a maximum of Rs 1,400 crore and the opportunity to sell up to Rs 1,800 crore through an offer for sale (OFS). The issue was set to have a price range of Rs 95-100 per unit by the company. Nexus Select Trust boasts a collection of 17 functional shopping centres, including Delhi's Select City Walk, in 14 cities covering 9.8 million square feet. It also offers mixed-use office spaces and 2 hotels with 354 rooms.
Following the IPO, Blackstone's ownership stake in Nexus Select Trust will decrease from 60 percent to 43 percent. The share of Select City Walk's promoters is set to experience a small reduction from 25 percent to 24.3 percent. Currently, there are three REITs that are listed on the Indian stock exchanges: Embassy Office Parks REIT, Mindspace Business Parks REIT, and Brookfield India Real Estate Trust. However, it should be noted that all three of these REITs are supported by office assets that are leased.
The newest addition to Blackstone's repertoire is their third REIT sponsorship. India witnessed the launch of its first REIT, Embassy Office Parks, followed by the introduction of Mindspace Business Parks REIT. The offer was managed by a group of companies, including BofA Securities India, Axis Capital, Citigroup Global Markets India, HSBC Securities and Capital Markets (India), IIFL Securities, JM Financial, J P Morgan India, Kotak Mahindra Capital Company, Morgan Stanley India Company, and SBI Capital Markets.
A Real Estate Investment Trust, also known as a REIT, is structured as a corporation, partnership, association, or trust, and its main objective is to invest in real estate either by acquiring properties or mortgages. REITs distribute shares that are traded on the stock market and can be purchased and sold in the same manner as common stocks. To qualify as a REIT, the firm has to allocate no less than 75% of its assets towards property investments and generate no less than 75% of its earnings through real estate-centred undertakings.
REIT have gained popularity worldwide and, in recent years, was introduced in India as a way to encourage investment in the real estate industry and generate profits from assets that generate rent. This technology can assist in unearthing the significant worth of properties and facilitate the involvement of retail investors.
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