We recently listed our real estate investment trust (REIT) on the BSE (formerly Bombay Stock Exchange) and the country’s National Stock Exchange (NSE). Brookfield India Real Estate Trust is the country’s only institutionally managed public commercial real estate vehicle and is the third REIT to be listed in India.
Brookfield Asset Management
Total Assets under Management
Here’s the biggest news from Brookfield Properties yet: In February 2021, we announced our initial public offer (IPO) for our real estate investment trust (REIT)—Brookfield India Real Estate Trust! The assets that are part of this initial REIT offering are our four campus-style office parks in Mumbai, Gurugram, Noida and Kolkata. These campuses are amongst the largest campuses in their respective regions with the best of amenities and house the offices of multi-national corporations such as Barclays, Bank of America Continuum, Accenture, Tata Consultancy Services and Cognizant.
Our IPO opened on February 3 and closed on February 5. The IPO of our REIT was subscribed almost eight times on the final day with good response across institutional (4.80 times subscription) and retail (subscribed 11.78 times) categories. Ahead of the IPO, our REIT raised Rs 1,710 crore from anchors—mutual funds and insurance companies.
In February 2021, we announced our initial public offer (IPO) for our real estate investment trust (REIT)—Brookfield India Real Estate Trust.
REIT is a relatively new investment instrument in the Indian context but is popular in global markets. Modelled on the lines of mutual funds, REITs allow investors to invest in income-generating real estate such as office spaces and commercial buildings. An attractive investment vehicle, REITs give a stable cash flow and favourable dividend yields to investors. The minimum investment required is Rs. 50,000 or a lot of 100 units, whichever is of a higher value. Investors in our IPO need to invest in at least 200 units.
Brookfield India Real Estate Trust is sponsored by an affiliate of Brookfield Asset Management (one of the world’s largest alternative asset managers and investors) and is managed by Brookprop Management Services Private Limited.
Our Manager, Brookprop Management Services Private Limited, has a management team with extensive industry experience that helps us manage our office parks in India. As a real estate service company, it provides management services, including facility management and project delivery to the real estate assets held by the Brookfield Group across India. Our Manager’s team has deep domain knowledge and experience in managing these properties and has demonstrated a robust track record in delivering value. Since April 1, 2015, our Manager has leased 4.3 million sf and delivered 3.6 million sf of completed area within the Initial Portfolio.
Further, Brookprop Management Services Private Limited is highly regarded in the real estate community and has extensive relationships with a broad range of tenants, brokers and lenders. Our Manager’s team is led by Alok Aggarwal (the Managing Director and CEO-India Office Business of our Manager). The team has in-depth experience in real estate investments, asset management, research and property management, with the key managerial personnel and core team having an average of more than 25 years of experience in the real estate industry in India.
As such, our Manager has operating and investing experience through multiple real estate cycles, and provides valuable insight and perspective into the portfolio management of our current office parks as well as the underwriting of new investments.
Strategically located properties that are difficult to replicate:
Our office parks are in the key gateway markets of Mumbai, Gurugram, Noida and Kolkata with easy access to mass transportation, high barriers to entry for new supply, limited vacancy, and robust historical rental growth rates.
This is our first REIT in Asia and it will hopefully strengthen India’s story of attracting global institutional capital for commercial real estate as well as retail penetration of investing in stable income generating assets.
Placemaking capabilities: Placemaking is ingrained in our development and operating philosophy, enabling us to provide our tenants with a unique ‘servicebased experience’. The size and scale of our fully-integrated office parks allow us to deliver an all-encompassing workspace ecosystem to our tenants with modern infrastructure and amenities, including day-care facilities, premium F&B outlets, convenience shopping kiosks, shuttle services and multi-cuisine food courts.
Diversified blue-chip tenant roaster and cash flow stability: In addition to a diversified base of marquee tenants, our initial portfolio has a stable, long-term tenancy profile with staggered expirations and a weighted average lease expiry of 6.8 years, providing significant cash flow stability to our business.
Significant internal and external growth opportunities: The value of our real estate assets will have two sources of growth: first, through opportunities to increase net operating income (NOI) from our initial portfolio, and second, through the acquisition of additional properties.
Internal growth: We have contractual escalation provisions in almost all our leases, mark-to-market of in-place rents as long-term leases expire, lease-up of recently completed construction and near-term ‘on-campus’ development. This has helped us grow our organic cash flow.
External growth: Our conservative and prudent capital structure will enable us to drive growth through value accretive acquisitions. We expect to significantly benefit from our options to acquire two large campus-style office parks in Gurugram and Noida, and our right-offirst- offer properties in Mumbai.
This is our first REIT in Asia and it will hopefully strengthen India’s story of attracting global institutional capital for commercial real estate as well as retail penetration of investing in stable income-generating assets.