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GIC, QIA, ADIA look to invest $400 million in Prestige Estates

BENGALURU: Singapore’s sovereign wealth fund GIC, Qatar Investment Authority (QIA) and Abu Dhabi Investment Authority (ADIA) are in talks with Prestige Estates to invest about $400 million (Rs 2,880 crore) as part of the property developer’s plan to monetise some of its commercial office space and mall assets, before it goes for a REIT (real estate investment trust) listing by the end of this year, a person familiar with the matter said. GIC is almost certain to be a participant. It already holds about 9% in Prestige after the Bengaluru-based realtor raised Rs 436 crore from it in a Rs 900 crore-QIP (qualified institutional placement) last month.

Chief executive Venkat Narayana said in a postearnings call with analysts that the company was in talks with investors. “There are 2, 3 large investors who had approached us and who have been discussing to partner for the pre-REIT as well. So, as to participate in the portfolio now and become anchor when we do a public market REIT,” he said in January. Prestige declined to comment on the names of the potential investors. GIC and QIA could not be reached for comment and ADIA declined comment . The fund-raise will not only help the company bring down debt but also increase its rent-yielding portfolio without borrowing additional money. The plan is now to go for a hybrid REIT – a mix of commercial and retail – unlike previously when the company mulled separate REITS for the two asset classes. REITs are listed entities that invest in leased office and retail assets allowing developers to raise funds by selling completed buildings to investors. About 90% of the profits must be returned to the holders of the security as dividends. Currently, Prestige has 15 million sqft of operating assets which include 11 million sqft of Grade A office space and 4 million sqft from 10 malls. Another 35 million of commercial and 6.5 million of retail assets are under various stages of development, as per the latest investor presentation on its website. Recently the company also expanded into Mumbai. REIT’s have become popular in India since Blakcstone-backed Embassy Office Parks went public with the country’s first offering. In December, K Raheja Corp and Blackstone also filed for a REIT, looking to raise Rs 1,000 crore through fresh issue of shares.

March 02, 2020

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