Blackstone real estate investment trust’s success lures global funds to India

Mumbai: Blackstone-backed real estate investment trust’s successful India trading debut has left global funds including Japan’s NikkoAM-StraitsTrading Asia wanting a piece of the action.

Eastspring Investments, North Carolina Fund, and Sentry Global are among names looking to invest in the instrument that bets on India’s rent-yielding real estate, said Shobhit Agarwal, managing director at Anarock Capital.

Blackstone Group LP-backed Embassy Office Parks REIT, the first such issuance in India, has soared about 35% since its debut in March, enticing more investors for similar instruments and providing India’s cash-starved property firms a new fund-raising tool. The performance has beaten indexes that track REITs in Singapore and the local BSE Realty Index of 10 developers.

India can raise $25 billion through REITs over the next three years listing around 150 million square feet of rent-yielding office properties, according to Anarock.

Meanwhile, Blackstone along with an Indian partner K Raheja Corp. may look at listing a second REIT, Bloomberg Quint reported this month. The instrument offers a fixed return from a pool of rent-yielding assets, along with the prospect of capital appreciation.

Bengaluru-based Prestige Group is also likely to list its first commercial office REIT soon, Agarwal said. Others that are likely to consider listing REITs include Bengaluru-based RMZ Corp, Mumbai-based Godrej Properties and Pune-based Panchshil Realty.