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Brookfield REIT IPO Review
It almost looks like we are already making up for all the lost time from 2020. It at least seems that way in the primary markets with IPO’s every other week. In this article, we cover the Brookfield REIT IPO Review and look into important IPO information and find out the possible prospects of the company.
About the Company – Brookfield REIT IPO Review
Brookfield Real Estate Investment Trust India is the Indian REIT wing of the Canadian asset manager Brookefield Group. The company is looking to raise Rs. 3,800 crore this week during its IPO from 3-5 Feb 2021. REITs are listed entities that invest in income-generating properties and distribute at least 90 percent of their income proceeds to unit-holders through dividends. The company has 4 large campus-format office parks strategically located in Mumbai, Noida, Gurugram, and Kolkata. They have a Committed Occupancy of 92% and leased to marquee tenants with 75% of Gross Contracted Rentals. Their clients include MNC’s like Barclays, Bank of America Continuum, RBS, Accenture, Tata Consultancy Services, and Cognizant. The company currently owns 1.4 crore square feet of its commercial properties across the country. The company is also looking to add another 1.5 crore square feet of space in the next few years.
Brookefield REIT owns $17 billion across real estate, infrastructure, renewable power, and private equity in India. The company also owns seven toll roads totaling more than 600 km of roadway, solar and wind assets, construction business, and real estate management services.
So far there have been only two other Reit IPO’s in the Indian markets. Those being the Embassy REIT IPO launched in April 2019, the Mindspace REIT IPO which was launched in July 2020 in the midst of the pandemic. However, Brookfield REIT is the only institutionally managed public commercial real estate vehicle in India.
(Rs. in millions)
WFH and Office Parks
Investors may be concerned when it comes to responses given by companies during the pandemic. Most of the companies shifted their activities to the Work From Home(WFH) mode of functioning. This could have been a challenge to the office parks like those provided by Brookefield. But the company has stated that there is no data to suggest that the WFH concept is the new normal and exuded confidence that benefits like closely working together for productivity purposes will eventually get teams to work from offices. Brookefield REIT also stated that they have over 90% occupancy at present. All the properties have been working through the lockdown. Their collections have been over 98% and 5 lakh square feet of space has been re-leased during the pandemic.
Experts have also stated that the IPO could not have come at a better time as the real estate markets in India have matured and there could be a correction within 3 months when the loan moratorium period ends.
Brookefield REIT going public would also encourage more real estate owners to go for REIT listing and being a global company can also further increase the inflow of capital into the domestic real estate.
Key IPO Information – Brookfield REIT IPO Review
BSREP India Office Holdings V Pte. Ltd is the promoter of the company. Morgan Stanley India Co., DSP Merrill Lynch Ltd, Citigroup Global Markets India Pvt, and HSBC Securities and Capital Markets (India) Pvt. have been appointed as the global coordinators and book-running managers to the issue.
Following are the key details for the IRFC IPO:
| Particular | Details |
|---|---|
| IPO Size | ₹3,800.00 Cr |
| Fresh Issue | ₹3,800.00 Cr |
| Offer For Sale(OFS) | Nil |
| Opening Date | Feb 3, 2021 |
| Closing Date | Feb 5, 2021 |
| Face Value | ₹10 per equity share |
| Price Band | ₹274 to ₹275 per equity share |
| Minimum Lot Size | 200 Shares |
| Maximum Lot Size | - |
| Listing Date: | Feb 17, 2021 |
Purpose of the IPO
The net IPO proceeds are proposed to be utilized for the following objectives:
- To make partial or full payment of existing indebtedness of the Asset SPVs.
- To meet general corporate purposes.
Closing Thoughts – Brookfield REIT IPO Review
Looking back at other REIT IPOs, both Embassy Office Parks REIT and Mindspace Business Park REIT are currently trading at a premium to their issue price. These companies are worthwhile investments for long term investors who look for steady incomes. REITs receive stable rental income and this is transferred to the unitholders in the form of dividends. Let us know what you think about the Brookefield REIT IPO.
Happy Investing!
Aron, Bachelors in Commerce from Mangalore University, entered the world of Equity research to explore his interests in financial markets. Outside of work, you can catch him binging on a show, supporting RCB, and dreaming of visiting Kasol soon. He also believes that eating kid’s ice-cream is the best way to teach them taxes.
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