Blackstone Plans India's First Retail Properties REIT

Blackstone Group, the entity behind India’s maiden real estate investment trust (REIT), is now planning to list the country’s first retail properties-centred REIT by mid-2022. The US-based private equity major has already kick-started the process of listing the proposed REIT by integrating and preparing its portfolio of mall properties across the country. Blackstone’s portfolio of income-producing retail assets for this REIT is estimated to be valued in the range of $2.2-2.5 billion, or about Rs 16,500-18,750 crore. The portfolio of retail properties for the REIT will be a combination of its subsidiary Nexus Malls along with the assets acquired through the recent $1.5 billion commercial assets deal with Prestige Group. While Blackstone has initiated work on internal processes, including identifying the assets, the selection of investment bankers is likely to be concluded by February. Blackstone’s move to list a retail assets REIT comes in the backdrop of rising consumption levels, favourable demographics, and aspirational brands in the country. Nexus Malls is one of India's largest retail real estate platforms with a portfolio of 17 malls across 13 major cities. In a short span of five years, Nexus Malls owns and operates over 9.3 million sq ft of grade A retail space in the country. This proposed retail REIT portfolio includes the global institutional investor’s recent acquisition of Prestige Group’s commercial assets including malls in Bangalore, Chennai, and Hyderabad. In March, Blackstone concluded its acquisition of Prestige Group’s commercial portfolio that included malls in Bangalore, Chennai and Hyderabad besides offices and hotels. Blackstone is now India’s largest owner of office and retail space with an office portfolio of 135 million sq ft and over 9.3 million sq ft of retail space, besides 40 million sq ft of logistics space. Retail malls have become a lifestyle component in the country though organised retail remains a relatively small component. Blackstone has emerged as the most aggressive institutional investor in India, with overall assets under management estimated at $60 billion across various sectors, making it one of the top 10 business groups in the country. Real estate accounts for nearly $20 billion of its asset value across its 42 investments.