Blackstone-Sattva JV to File Papers for India's Largest Rs 7,000-Crore REIT IPO by Mid-February
Blackstone, in partnership with Sattva Group, is preparing to file the draft papers for their upcoming Real Estate Investment Trust (REIT), named Knowledge Realty Trust. The REIT aims to raise Rs 7,000 crore, with the filing expected by mid-February 2025. As per Moneycontrol report, once launched, Knowledge Realty Trust will be the largest REIT in India, with a total leasable area of 48 million square feet, making it the second-largest in Asia.
The REIT will be majority owned by Blackstone, holding a 55 percent stake, while Sattva will retain 45 percent. The portfolio is expected to span six major cities, including Mumbai, Bengaluru, Hyderabad, and Pune, with a total of 30 office properties. Some of the prominent assets slated for inclusion are One BKC, One International Centre, and One World Centre in Mumbai; Sattva Knowledge City and Sattva Knowledge Park in Hyderabad; and Cessna and Exora Business Parks in Bengaluru. These high-profile properties are strategically located in key urban centers, expected to attract considerable investor interest.
Kotak Mahindra Capital will play a significant role as the lead manager of the IPO. Kotak's involvement adds further credibility and strength to the offering, bringing with it years of experience and a robust network in the Indian capital markets.
Key Properties in the Knowledge Realty Trust Portfolio
The Knowledge Realty Trust’s portfolio will feature high-profile commercial real estate, making it a noteworthy addition to the Indian REIT market. Some of the key properties include well-established office spaces like One BKC, One International Centre, and One World Centre in Mumbai, Sattva Knowledge City and Sattva Knowledge Park in Hyderabad, as well as Cessna and Exora Business Parks in Bengaluru. These locations are strategically positioned in key urban centers, making them highly attractive to businesses and investors. The inclusion of such prime assets highlights the potential of the REIT to draw substantial investor interest, both from domestic and international markets.
Strategic Positioning in a Growing Market
The Indian commercial real estate sector has seen steady growth in recent years, driven by increasing demand for office spaces, particularly in metropolitan cities like Mumbai, Bengaluru, and Hyderabad. The launch of Knowledge Realty Trust comes at a time when REITs are becoming a popular investment vehicle in India. These investment trusts allow investors to access high-quality commercial properties without the need for direct ownership, offering a diversified and relatively lower-risk option for those looking to invest in real estate.
Blackstone’s decision to enter the market with this massive REIT is an indication of its confidence in the long-term growth potential of India’s commercial real estate sector. As a leading global player, Blackstone’s reputation for managing real estate assets in India adds further credibility to the Knowledge Realty Trust and its likely success.
Blackstone’s Track Record with REITs in India
This is not Blackstone’s first venture into the REIT market in India. In fact, Knowledge Realty Trust will mark the firm’s fourth REIT offering in the country, underscoring its growing influence in the Indian real estate space. Blackstone previously launched successful REITs such as the Embassy Office Parks REIT and the Mindspace Business Parks REIT, both of which have been well-received by the market.
The Embassy Office Parks REIT, India’s first REIT, raised Rs 4,750 crore during its IPO in 2019 and currently manages a portfolio of 38.4 million square feet. Similarly, the Mindspace Business Parks REIT, backed by Blackstone and K Raheja Corp, raised Rs 4,500 crore and manages 34.8 million square feet of office space. These successes have set a strong precedent for the Knowledge Realty Trust’s expected launch and its potential to capture investor attention.
In addition to office-based REITs, Blackstone has also sponsored Nexus Select Trust, a retail-focused REIT that manages 9.9 million square feet across 17 malls, along with some hotel and office assets. This diversification strategy allows Blackstone to cater to different segments of the real estate market, from office spaces to retail properties, expanding its footprint in the Indian real estate sector.
Competition in the REIT Market
While Blackstone’s forthcoming Knowledge Realty Trust is set to be a dominant in the Indian REIT market, it faces significant competition from other established global investment firms. One of its primary competitors is Brookfield, which launched the Brookfield India Real Estate Trust (BIRET) in 2021. BIRET raised Rs 3,800 crore during its IPO and currently manages a portfolio of 28.9 million square feet of office space across key markets in India. Brookfield's established presence in the Indian real estate market and its strong portfolio make it a formidable competitor in the growing REIT sector.
Another notable competitor is the Embassy Office Parks REIT, which was the first REIT to be listed in India. Launched in 2019, Embassy Office Parks raised Rs 4,750 crore and has since become one of the largest office-focused REITs in the country, with a portfolio of 38.4 million square feet. Its success and ongoing market performance have made it a key player in the office-space segment, adding to the competitive pressure in the REIT landscape.
Despite the competition, Blackstone's large portfolio gives it an advantage. With 48 million square feet of office space, the Knowledge Realty Trust can attract a lot of investors. The REIT’s expected launch in mid-2025 is sure to add significant value to the growing portfolio of Blackstone in India’s commercial real estate sector.
