Blackstone-backed Embassy Group planning India’s first REIT

Global real estate firm Blackstone’s Indian venture Embassy Group is planning to launch India’s first ever real estate investment trust (REIT) this year. People familiar with the matter claimed that the company could issue a draft prospectus by June.

Real estate investment trusts are companies that earn their profits by owning, operating and financing realty properties like office buildings, housing apartments, shopping complexes, hotels and warehouses. Their functioning is similar to mutual funds but they deal exclusively in real estate only.

Blackstone Group already has a very successful REIT business in the United States, and it counts global giants like Microsoft and IBM as tenants in its office spaces there. Its Indian arm, Embassy Office Parks Management Services Pvt. Ltd. had applied to SEBI for REIT registration in 2016.

Embassy group’s CEO Michael Holland said that the company is planning to issue bond-like securities to raise as much as $1 billion, depending on finer details of the plans. He explained that they are currently in the process of assessing seven different asset classes in multiple cities for inclusion into the proposed REIT structure.

SEBI had framed regulations for REITs in 2014 following the government’s green signal, but not a single such company has been established in India till date. Considering the fact that the global REIT industry billed over $1.7 in total earnings two years ago, Embassy group’s attempt could finally encourage investors to use the REIT model to boost India’s real estate sector.