Brookfield REIT QIP Attracts 2X Demand; Marks LIC and IFC’s First Investment in Indian REITs
The Rs.2,800 crore Qualified Institutional Placement (QIP) by Brookfield India Real Estate Trust has attracted significant demand and has seen double demand coming from institutional investors. The ones notable among them are India’s biggest insurance company, LIC and the World Bank arm IFC, along with mutual funds houses such as ICICI Prudential MF and SBI MF.
This is the first ever investment by LIC and IFC in a Real Estate Investment Trust (REIT) in India, thereby establishing the increasing maturity and acceptability of REIT as a viable asset class in the Indian market.
The QIP of Brookfield REIT was launched on 9th December at the floor price of Rs.287.55 per unit. The funds raised under this issue will be primarily applied to repay partially or wholly loans taken by the REIT and its assets group. The outstanding borrowings of Brookfield REIT as of 30th September stood at Rs.12,148.8 crore, according to the offer document filed by it with the stock exchanges.
Investment Advisors and Previous Fundraising
This fundraising effort by Brookfield REIT was supported by investment banks Kotak Mahindra Capital, Avendus Capital, and Elara Capital. The trust undertook this second QIP after its Initial Public Offering in February 2021. Earlier in August 2023, Brookfield issued another QIP for the purpose of raising Rs.2,305 crore while targeting only institutional investors.
Overview of the REIT Portfolio
Brookfield REIT’s portfolio consists of 10 Grade-A commercial offices and IT parks located across key markets such as Mumbai, Delhi, Gurugram, Noida, and Kolkata. As of September 30, the portfolio covers 28.9 million square feet. This includes 24.3 million square feet of finished projects, 0.6 million square feet of area still under construction, and 4 million square feet planned for future development.
The portfolio includes office spaces like Worldmark Aerocity, Worldmark Gurugram, Airtel Center, and Pavilion Mall.
As of September 30, 88.9% of the spaces were occupied by well-known companies such as Tata Consultancy Services, Accenture, Bharti Airtel, Cognizant, Capgemini, TIAA, Samsung, and RBS Services India.
Though Brookfield REIT’s QIP was successful, the stock declined by a small percentage on December 11 to Rs.281.09 on the National Stock Exchange, 2.4% below the previous close.
This QIP marks increased institutional investor confidence in India’s REIT market and brings out the growing scope for this asset class in India’s financial landscape.
