Mindspace REIT raises Rs 1,519 crore from investors ahead of IPO
Mindspace Business Parks REIT, owned by K Raheja group and Blackstone, has raised Rs 1,518.74 crore from anchor investors ahead of its public issue that will hit the capital market on July 27. Mindspace has proposed to raise up to Rs 4,500 crore from the public issue, which will close on July 29.
The company, which is launching India's second Real Estate Investment Trust (REIT), had earlier announced raising Rs 1,125 crore from strategic investors. Mindspace has so far raised Rs 2,644 crore from strategic and anchor investors, out of total issue size of Rs 4,500 crore.
In a regulatory filing, Mindspace informed that the REIT Offer Committee of the governing board of K Raheja Corp Investment Managers LLP (acting as manager to the Mindspace Business Parks REIT) at its meeting held on Friday have finalised allocation of 5,52,27,200 units at Rs 275 per unit to anchor investors.
Total proceeds from anchor investors are Rs 1,518.74 crore. Singapore government, Fidelity and Nomura Trust, HSBC Global, Capital Income Builder and Cohen & Steers are among major investors. It finalised allocation of 4,09,09,000 units to strategic investors at Rs 275 per unit.
Mindspace has fixed the price band for its public issue at Rs 274-275 per unit. Mindspace filed the final offer document with the market regulator Sebi last week. As per the offer document, Mindspace Business Parks REIT aims to raise up to Rs 1,000 crore through issue of fresh units and up to Rs 3,500 crore through offer for sale (OFS). Last year, Embassy Office Park REIT, the country's first REIT issue, raised nearly Rs 5,000 crore. The REIT, a popular instrument globally, was introduced in India a few years ago aimed at attracting investment in the real estate sector by monetising rent-yielding assets.
It helps unlock the massive value of real estate assets and enable retail participation. Mindspace Business Parks REIT has brought 295 lakh sq ft of office properties located in Mumbai, Pune, Chennai and Hyderabad under the REIT portfolio and out of that around 245 lakh sq ft areas are completed. The annual rental income is currently around Rs 1,300 crore, which is estimated to reach Rs 2,000 crore in next few years, sources said. The company had filed the initial offer document in December last year. The units of the REIT will be listed on the BSE and the NSE. Despite multi-year slowdown in the real estate market, the office market was performing well till coronavirus pandemic hit India. The net office space leasing was at record 450-500 lakh sq ft and gross leasing at 550-600 lakh sq ft last calendar year.
However, the COVID-19 has forced the corporates and coworking players to defer their expansion plans. As a result, the gross leasing of office space during the January-June period fell 37 per cent to 172 lakh sq ft, according to a report by Knight Frank India.