Prestige Estates Projects Ltd, which sold about 16 million square feet of commercial assets to private equity firm Blackstone two years back, is building more office assets now but this time it plans to keep them for its own REIT (real estate investment trust) offering.
The Bengaluru-based realtor has about 20 million square feet of office space under construction, of which a substantial portion is in Mumbai, Chief Executive Officer Venkat K. Narayana told businessline. The 20 msf of space will be ready by 2025 and take its total office portfolio to over 40 msf by then. The total expenditure is close to ₹13,000 crore.
Narayana said that several institutions were keen to buy its assets but “we don’t want to sell. We will only lease space.” He added that the office properties coming up would be marquee assets and that the company was looking to monetise them through a REIT listing. “That’s our own idea. With these assets we definitely have plans for a REIT.”
While he did not disclose the names of those eyeing Prestige Estates’ office assets, sources indicated that Blackstone, Brookfield had earlier evinced interest while a real estate fund sponsored by a large private bank was also interested.
In response to an email seeking clarification, a Blackstone spokesperson said it had no comments to offer while Brookfield did not respond.
Three Office-focused REITs
At present there are three office-focused listed REITs in the country – Embassy Office Parks REIT, Mindspace Business Parks REIT, and Brookfield Real Estate Trust.
Prestige Estates has over 7 msf of office space coming up in Mumbai of which two assets are in the central business district of Bandra Kurla Complex with a total sales value of ₹22,940 crore.
It has already completed an office project in Pune with a total leasable area of over 1 msf, about 2.5 msf is coming up in Hyderabad and in its home city of Bengaluru another 10 msf is under process, Narayana said.
The projected annuity income in FY24 is at ₹584.6 crore rising to Rs 2476 crore by FY28-end.