The media reported that Nexus Select Trust, backed by global investment firm Blackstone, submitted draft documents to market regulator SEBI on Thursday to launch an initial public offering of retail REITs in India to raise around $500 million.

Nexus Select Trust owns 17 operating malls in 14 major cities, covering approximately 10 million square feet and valued at roughly $3 billion.

According to media reports, Nexus Select Trust has submitted a draft Red Herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) and hopes to enter the capital market with India’s first retail REIT (real estate investment trust) listing in the first half of 2023. It added that the initial public offering (IPO) of Nexus Select Trust REIT is about $500 million.

This will be the third REIT sponsored by Blackstone. It launched India’s first REIT – Embassy Office Parks REIT and then Mindspace Business Parks REIT.

REITs are a globally popular vehicle launched in India a few years ago to attract investment in the real estate sector by monetising rent-generating assets. It helps unlock the enormous value of real estate assets and facilitates the participation of retail investors.

There are currently three REITs listed on the Indian Stock Exchange, Embassy Office Parks REIT, Mindspace Business Parks REIT and Brookfield India Real Estate Trust, but all are leased office assets. Nexus Select Trust will be the first REIT to own rental-generating retail real estate assets.

In its 10 million sq ft retail real estate portfolio, Nexus Select Trust also includes Select Citywalk Mall in South Delhi. There are about 3,000 stores in its shopping malls and about 1,000 brands.

Media reports that Blackstone is very bullish on the growth story in India’s retail sector, which has rebounded sharply following a second wave of the Covid-19 pandemic. Sales at its malls in April-June were 24% above pre-pandemic levels.

Nexus Select Trust has leased approximately 3.5 million square feet over the past three years and three months. Its senior management team comprises 9 CXOs (average experience over 20 years), headed by Dalip Sehgal (former Executive Director of Unilever India) as CEO and supported by over 500 employees.

The board members are diverse and experienced. Key board members include Michael Holland (Former CEO of Embassy REIT), Arjun Sharma (Chairman and Director, Select Group), Jayesh Merchant (Former Chief Financial Officer, Asian Paints), Sadashiv Rao (Former Director, IDFC) and Tuhin Parikh (BX India Head of the Real estate).

Blackstone’s real estate portfolio includes 85 properties totalling 150 million square feet across the office, retail and logistics.

Blackstone is one of the most prominent office landlords in India (41 assets totalling 101 million sqm). Blackstone recently established a wholly-owned platform, ‘Lumina’, to invest in data centres across Asia, with an initial focus on India.

In April 2019, Embassy Office Parks, backed by Blackstone and real estate firm Embassy Group, listed India’s first REIT with an issue of Rs 4,750 crore.

In August 2020, Mindspace Business Parks, sponsored by K Raheja and Blackstone, launched the country’s second REIT raising Rs 4,500 crore. Global investment firm Brookfield has listed the country’s third REIT after raising Rs 3,800 crore in an initial public offering.