Three sovereign funds seek to invest $ 400 million in Prestige
BENGALURU: Singapore's sovereign wealth fund, () and the Abu Dhabi Investment Authority (ADIA) are in talks to invest around $ 400 million (Rs 2,880 million rupees) as part of the real estate developer's plan to monetize some of its commercial office spaces and shopping center assets, before it leaves for a REIT (real estate) list by the end of this year, said a person familiar with the matter.
It is almost certain that GIC is a participant. He already owns around 9% in Prestige after the Bangalore-based real estate agent raised Rs 436 crore in a Rs 900 crore-QIP (qualified institutional placement) last month.
Executive President Venkat Narayana said in a post-earnings call with analysts that the company was in talks with investors. “There are 2, 3 major investors who have approached us and who have also been discussing to partner for the pre-REIT. So, to participate in the portfolio now and be an anchor when we do a public market REIT, ”he said in January. Prestige declined to comment on the names of potential investors. GIC and QIA could not be reached for comment and ADIA declined to comment.
Fundraising will not only help the company reduce debt, but also increase its income portfolio without borrowing additional money. The plan now is to opt for a hybrid REIT, a combination of commercial and retail, unlike when the company reflected on separate REITS for the two asset classes. REITs are listed entities that invest in leased offices and retail assets that allow developers to raise funds by selling complete buildings to investors. Around 90% of the profits must be returned to the holders of the guarantee as dividends.
Currently, Prestige has 15 million square feet of operating assets that include 11 million square feet of Grade A office space and 4 million square feet of 10 shopping centers. Another 35 million commercial assets and 6.5 million retail assets are in various stages of development, according to the investor's latest presentation on its website. Recently, the company also expanded to Mumbai.
REITs have become popular in India since the parks of the Blakcstone-backed embassy office were made public with the country's first offer. In December, Blackstone also requested a REIT, seeking to raise Rs 1,000 million rupees through a new share issue.