Brookfield India Real Estate Trust II Details explained by Axis Capital
Brookfield India Real Estate Trust II Details explained by Axis Capital
The Brookfield India Real Estate Trust is a Fresh Issue of Units aggregating upto Rs 3800 cr. Price band for the issue is Rs 274 – Rs 275 and the Bid Lot is 200 Units & in multiple thereafter. Minimum Bid Amount is Rs 54800 – Rs 55000. Global coordinators and Book running lead managers are Morgan Stanley, BofA Securities, Citigroup Global, HSBC Securities while Book running lead managers are Axis Capital, Ambit, IIFL Securities, JM Financial, J.P. Morgan India, Kotak Mahindra Capital, SBI Capital Markets. The Issue opens on Wednesday, 3 rd Feb’2021 and closes on Friday, 5 th Feb’2021. Link Intime India is the registrar to the issue.
The Brookfield India Real Estate Trust (“Brookfield REIT”) is India’s only institutionally managed public commercial real estate vehicle. Sponsored by an affiliate of Brookfield Asset Management (“BAM”), one of the world’s largest alternative asset managers with approximately US$575 billion in assets under management, as of September 30, 2020, their goal is to be the leading owner of high quality income producing commercial real estate assets in key gateway Indian markets, which have significant barriers to entry.
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The Brookfield India Real Estate Trust owns an Initial Portfolio of 4 large campus-format office parks, which are “business-critical”, located in some of India’s key gateway markets - Mumbai, Gurugram, Noida and Kolkata. Their Initial Portfolio totals 14.0 msf, comprising 10.3 msf of Completed Area, 0.1 msf of Under Construction Area and 3.7 msf of Future Development Potential.
The Brookfield India Real Estate Trust initial Portfolio’s Completed Area has a Same Store Committed Occupancy of 92% (and a 87% Committed Occupancy, which includes the recently completed 0.5 msf at Candor Techspace N1) and is leased to marquee tenants with 75% of Gross Contracted Rentals contracted with multinational corporations such as Barclays, Bank of America Continuum, RBS, Accenture, Tata Consultancy Services and Cognizant.
While a 7.1 year WALE provides stability to the cash flows of their Initial Portfolio, they are well positioned to achieve further organic growth through a combination of contractual lease escalations, 36% mark-to-market headroom to in-place rents, lease-up of vacant space and near-term completion of Under Construction Area to meet tenants’ expansion needs.
The Brookfield India Real Estate Trust intends to leverage Brookfield Group’s real estate holdings in India by entering into agreements that provide rights to acquire their existing properties in their markets. They have the exclusive right, at their discretion, to acquire the Identified Assets, one office park in each of Gurugram and Noida, similar to the office parks in the Initial Portfolio that are near-stabilization and currently owned by members of the Brookfield Group. The Identified Assets encompass 8.3 msf of office space. The Initial Portfolio, Identified Assets and ROFO Properties combined, creates the potential for them to almost double their Initial Portfolio’s Leasable Area to 28.9 msf.
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