Brookfield India Real Estate Trust plans to raise up to Rs 3,500 cr

Brookfield India Real Estate Trust plans to raise up to Rs 3,500 crore through issues of units to institutional investors or preferential allotment of units, mainly to fund its proposed acquisition of two commercial properties.

Last month, Brookfield India Real Estate Trust (BIRET) and Singapore's sovereign wealth fund GIC had announced an equal partnership to acquire two commercial properties in India for Rs 11,225 crore.

The company had proposed to fund the acquisitions through an institutional placement of up to Rs 3,500 crore and said it might also consider other forms of fund raising, including preferential allotment of units.

According to sources, Brookfield India Real Estate Trust has started the process to raise funds.

When contacted, BIRET spokesperson said that the board of the manager of the REIT has approved an enabling resolution to raise up to Rs 3,500 crore through institutional placement, which is subject to unitholder approval. Of this, Rs 3,400 crore is proposed to be raised for asset acquisitions".

The spokesperson did not comment on start of the process of fund raising.

BIRET is among four listed Real Estate Investment Trust (REIT) on Indian stock exchanges. Its portfolio comprises of five large campus format office parks located in Mumbai, Gurugram, Noida, and Kolkata.

The portfolio consists of 18.7 million square feet comprising 14.3 million square feet of completed area, 0.6 million square feet of under construction and 3.9 million square feet of future development potential.

Last month, BIRET and GIC announced acquisition of two assets in the financial capital and Gurugram with a built-up area of 6.5 million square feet. These two assets are presently owned by Brookfield Asset Management's private real estate funds.

The two properties are Brookfield's Downtown Powai, which is a portfolio of nine commercial properties spread over three clusters having 2.7 million square feet of operational area and 0.1 million square feet of area under expansion, and Candor Techspace in Gurugram, which has over 3.7 million square feet of operational space.

BIRET's operating area will increase by 44 per cent and consolidated gross asset value by 73 per cent after the acquisition of the assets, it had said in May.

REIT, a popular instrument globally, was introduced in India a few years ago to attract investment in the real estate sector by monetising rent-yielding assets. Rental income earned by REITs are distributed to unitholders.

REITs help unlock the massive value of real estate assets and enables the participation of retail investors. Out of four listed REITs on Indian bourses, three are backed by office assets and one by retail (shopping malls) real estate assets.