Brookfield REIT Files With SEBI For IPO Offer Of USD 600 Million

Following the footsteps of Mindspace REIT, Brookfield REIT, a Canadian global asset management company, is planning to float its IPO offer in India. The company filed the draft red herring prospectus (DRHP) with the Indian bourses seeking approval to launch RS 4,400 crores or USD 600 million IPO offer.

Brookfield REIT IPO might list during mid-December or early January. It will be the third REIT to enlist in Indian exchanges, after Embassy and Mindspace.

The REIT has 22 million square feet of commercial and offer space under management, of which 10 million square feet is already complete and leased. It has invested in key properties in Mumbai, Noida, Gurugram, and Kolkata. Brookfield REIT is the sole investor of the REIT and looking for public sponsorship in 14 million square feet of property under management.

Investing in REIT isn’t the same as investing in common equities. REITs are particular types of corporations, where the manager lists assets to receive steady rental income from those.

Brookfield IPO will help the company free some of its invested capital. Brookfield Asset Management approached SEBI seeking approval to monetise some of its assets via IPO offer.

Brookfield IPO will contain both fresh scrips and offer for sale shares. Sources aware of the development informed that the firm is considering the end of 2020 or early 2021 for listing. The final decision is pending on approval from SEBI and investors.

As many as eleven merchant banks will be working as lead managers on Brookfield REIT IPO, including Morgan Stanley, HSBC, BofA Securities, and Citi acting as global coordinators for the offer.

Conclusion

Brookfield REIT will be the third to list with Indian bourses. Last year Embassy REIT became the first to enlist with the exchange. Mindspace REIT floated its offer amid lockdown, received an overwhelming response from investors.  Both the REITs generated initial dividends at a healthy spread of 75-100 bps over the 10-years GOI bonds. Experts like Nitin Gupta, Managing Director, Macquarie Capital, believe that the outbreak of the global pandemic of COVID-19 has triggered a demand for REITs.  IRDA has approved insurance companies to invest in REITs and InVits, which has further piqued local institutional investors’ interest in real estate investment trusts (REIT).