Sattva Group and Blackstone Backed REIT IPO A Game Changer in Indias Real Estate Market

 

In a significant development for Indias real estate sector Knowledge Realty Trust KRT a Real Estate Investment Trust REIT sponsored by Bengaluru based Sattva Group and global investment firm Blackstone Inc has filed a draft prospectus with the Securities and Exchange Board of India SEBI to raise approximately Rs 6200 crore equivalent to 71255 million through an initial public offering IPO

Portfolio and Asset Details

KRTs portfolio encompasses 30 Grade A office assets across six major cities Bengaluru Mumbai Hyderabad Chennai Delhi and Ahmedabad totaling 48 million square feet with 37 million square feet already completed and operational This extensive portfolio positions KRT as Indias most geographically diverse office REIT Notable properties include One BKC One International Centre and One World Centre in Mumbai Sattva Knowledge City and Sattva Knowledge Park in Hyderabad and Cessna Business Park and Sattva Global City in Bengaluru

Financial Projections and Strategy

The REITs projected net operating income NOI is expected to grow at a compound annual growth rate CAGR of 18 percent between fiscal years 2025 and 2027 KRT also maintains a low loan to value LTV ratio and has identified a pipeline of 7 million square feet across four assets for future acquisitions The weighted average lease expiry WALE stands at 86 years indicating stable long term rental income

Occupancy and Tenant Profile

The portfolio boasts a 90 percent occupancy rate with 76 percent of the leased space occupied by multinational corporations MNCs and 45 percent by Global Capability Centers GCCs This high quality tenant mix underscores the portfolios strong market positioning and resilience

Market Position and Comparisons

Upon listing KRT is set to become the largest office REIT in India based on gross asset value GAV estimated at around Rs 60000 crore This positions KRT ahead of existing REITs such as Embassy Office Parks REIT Mindspace Business Parks REIT and Brookfield India Real Estate Trust REIT

Use of Proceeds

The IPO proceeds are planned to be utilized for debt repayment and funding future acquisitions thereby strengthening the REITs balance sheet and supporting its growth strategy

Sponsorship and Management

Blackstone holds a 55 percent equity stake in KRT while Sattva Group retains the remaining 45 percent The REIT has appointed Shirish Godbole as CEO and Quaiser Parvez as COO The board of Knowledge Realty Office Management Services the manager of KRT includes independent directors Anup Shah Ajay Mahajan and Bhavna Thakur along with non independent directors Tuhin Parikh Bijay Kumar Agarwal and Shivam Agarwal

Broader Market Context

The Indian REIT market has been expanding rapidly with active participation from large developers and investors The listing of KRT is expected to further enhance liquidity in the real estate sector through increased participation from retail investors According to real estate consultant Vestian nearly 60 percent of pan India office stock is REIT worthy across the top seven cities indicating significant potential for future REIT listings in the country

This development marks a significant milestone in Indias real estate investment landscape offering investors a diversified and income generating portfolio of premium office assets across major cities