Blackstone’s Nexus Select Trust IPO likely to get SEBI approval next week

Blackstone-sponsored real estate investment trust, Nexus Select Trust, is likely to get the go ahead from the Securities and Exchange Board of India early next week, for its initial public offering of units.

The country’s first retail REIT is expecting to list its units by May 15, as required by regulations, sources said.

The REIT is issuing fresh units worth ₹1,600 crore while major sponsor Blackstone and some other smaller holders will be selling units worth ₹2400 crore. The portion raised by the REIT will be primarily used to pay down debt.

The REIT currently owns about 17 malls spread over close to 10 million square feet. It is also in discussions to acquire more malls in places such as Ranchi and Chennai. The immediate pipeline for acquisitions is around 2.5 msf, sources said. The intention is to double its portfolio over the next five years.

A good chunk of the REIT portfolio, about 4.4 msf, was through acquisitions from the Prestige Group. Delhi’s Select Citywalk Mall, located in upmarket Saket in the capital city, will be added to the REIT when it lists. The promoter of the mall Arjun Sharma and his family members will be getting units of the REIT and will be holding a little over 24.6 percent stake in it.

With an enterprise value of ₹23,000 crore, debt of ₹3,600 crore, the REIT will still have about $500 million for making acquisitions and adding to its portfolio.

After the draft prospectus was filed in November, the REIT’s average occupancy at its malls has risen to 96 per cent. It has also worked on the malls to ensure an attractive product mix and also rearranged layouts and to attract more footfalls, that was over 130 million at the time of filing the IPO papers.

The REIT intends to distribute 100 per cent of its net distributable cash flow, with close to 60 percent of it in the form of dividends.

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