The real estate investment market in India is about to witness another public company soo as the Property Share Investment Trust, a small and medium real estate investment trust (REIT), has officially filed draft papers with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) worth Rs 353 crore.

Proceeds and Purpose of the IPO

The Rs 353 crore IPO by the Property Share Investment Trust will be entirely a fresh issue of Platina units, with no offer for sale (OFS) component. The primary purpose of this offering is to generate capital for acquiring the Prestige Tech Platina asset through the Platina SPVs (special purpose vehicles). Any remaining funds from the IPO will be allocated for other general corporate purposes.

Key Players in the IPO Process

ICICI Securities Limited is the sole lead manager for the offer. Cyril Amarchand Mangaldas serves as the Indian Legal Counsel to both Property Share Investment Trust and the investment manager concerning PropShare Platina. KFin Technologies Ltd is appointed as the registrar of the offer, managing the entire application process, allotment, and refunds for investors.

Axis Trustee Services Limited will act as the Trustee for the issue. PropShare Investment Manager Private Limited is the Investment Manager for the offering, responsible for managing the property and making strategic decisions for the trust. The units from the IPO are proposed to be listed on the BSE (Bombay Stock Exchange).

About PropShare Platina

PropShare Platina offers an investment opportunity through its 246,935 square feet of office space within the Prestige Tech Platina, a LEED Gold-certified office building. Situated on the Outer Ring Road in Bengaluru, one of the city’s most sought-after commercial hubs, the building is ideally positioned to attract top-tier tenants.

A US-based tech company has already committed to leasing the entire space under a new nine-year lease agreement, which includes a weighted average lock-in period of 4.6 years. Additionally, the lease comes with a rent escalation of 15% every three years, ensuring rental income growth and providing investors with a stable and potentially lucrative investment.

Investors in PropShare Platina can expect a projected distribution yield of 9% for the financial year 2026 (FY26), making it an attractive investment option for those looking for steady income. The REIT model allows investors to benefit from the rental income generated by high-quality commercial properties.

The Outer Ring Road is a commercial hub in Bengaluru, accounting for around 34% of the city’s total office space, according to research conducted by Jones Lang LaSalle (JLL). This location is home to numerous multinational corporations such as Adobe, Amazon, Google, Samsung, CISCO, JP Morgan, Morgan Stanley, and Wells Fargo, making it a prime destination for businesses looking for high-quality office spaces.

Developed by The Prestige Group, the Prestige Tech Platina is strategically located near the upcoming metro station, providing easy connectivity to the airport and other parts of the city. This accessibility is expected to further enhance the property’s attractiveness to potential tenants.

PropShare Investment Manager Private Limited has decided to waive all annual management expenses, including investment and property management fees, for the financial years 2025 (FY25) and 2026 (FY26). This means that investors in the first scheme will enjoy two years of fee-free management.

From FY27 onward, a nominal fee of 0.25% will be charged, increasing slightly to 0.30% from FY28 onwards. To further align its interests with those of investors, Property Share has committed to investing at least 5% of the scheme’s units, amounting to Rs 17.6 crore, from its own capital.

The launch of the Property Share Investment Trust’s IPO comes at a time when India’s REIT market is gaining momentum. This investment vehicle allows retail investors to participate in the commercial real estate market, which was previously accessible only to large institutional investors.

Story first published: Saturday, September 28, 2024, 14:30 [IST]