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Hindustan Times
an hour ago
- Business
- Hindustan Times
Should You Invest in India's Biggest Office REIT IPO – Knowledge Realty Trust?
On August 5th, 2025, Indian investors will be offered a front-row seat to some of the country's most iconic office buildings—without ever needing to own one. The Knowledge Realty Trust REIT, or KRT REIT, opens its ₹6,200 crore initial public offering (IPO) this week, with ₹900 crore reserved for retail investors, at a price band of ₹95-100. In her column "Let's Get Real," Manisha Natarajan writes about The Knowledge Realty Trust REIT, or KRT REIT, that opens its ₹ 6,200 crore initial public offering (IPO) this week, with ₹ 900 crore reserved for retail investors And if the names behind it — Blackstone and Sattva Group weren't enough to stir investor excitement, the assets on offer might do the trick. We're talking about trophy addresses like One BKC and One World Centre in Mumbai, and Knowledge City in Hyderabad. Big, brand-name tenants like Amazon, Google, Cisco, and Goldman Sachs are already paying rent here. On paper, it feels like a great opportunity: owning a slice of India's finest commercial real estate and earning regular rental income. Big Question: Should You Invest? But is it really that simple? Or more importantly, is it worth your money? Before we dive into KRT's specifics, let me first take a step back, especially for readers new to REITs. Real Estate Investment Trusts, or REITs, allow regular investors to buy into high-quality commercial real estate such as offices, malls, and industrial parks — that you and I can't even afford to buy! You earn through dividends (a share of the rent collected) and, hopefully, from an increase in the REIT's unit price. In essence, it's a hybrid: part-debt, part-equity. SEBI regulates REITs, and you can buy or sell them just like any stock on NSE or BSE. India's REIT market is young but maturing fast. So far, we've had three listed office REITs — Embassy Office Parks, Mindspace Business Parks, and Brookfield India REIT. Knowledge Realty Trust is the fourth, and it comes in as the biggest yet, by Gross Asset Value ( ₹62,000 crore) and Net Operating Income ( ₹3,432 crore in FY25). It also promises a unique proposition — a highly diversified portfolio across six cities, with a sharp focus on India's three strongest office markets: Mumbai, Bengaluru, and Hyderabad. Nearly 96% of KRT's assets are in these three cities, which continue to lead the country in office demand and rental growth. So far, so good. But let's not gloss over the fact that REITs, like stocks, demand careful timing and entry. While they offer regular income, returns across the current 3 listed REITs have been varied — some as low as 8%, others closer to 13-14%. Just like a stock, buying a REIT at the right price and fair valuation matters. Also Read: Are REITs the stability your stock portfolio needs now? KRT's management claims their IPO is being offered at a discount. According to Ashish Mohta, Senior Managing Director, Blackstone, the NAV (Net Asset Value) is around 10% lower than current market value. In some cases, such as their One BKC property in Mumbai, the discount he insists is even deeper — nearly 30-35% lower than comparable strata sales in the area. If these numbers hold true, there's potentially value left on the table for new investors. One of the compelling features of KRT IPO is what's known as 'mark-to-market' potential. Many tenants have been in these buildings for years, paying rents negotiated five to ten years ago. As leases expire and are renewed at today's market rates, there's a chance to lift overall income significantly — as much as 20% according to management's estimates. Also Read: Sattva Group, Blackstone sponsored REIT raises ₹1,400 cr in pre-IPO round What About REITs' Performance? But here's where we have to get real. Historically, REITs in India haven't always passed on their full income growth to investors. Net Operating Income (NOI) may grow 8-10%, but dividend distributions — the money that actually lands in your bank account, have often grown just 2-3%. Why the disconnect? Shirish Godbole, CEO of KRT REIT, addressed this head-on in my conversation with the management. He insists that KRT will not only distribute 100% of available cash flows, but most of their projected growth is also already contracted, not speculative. 'We're confident that the 13% CAGR on net operating income, will be delivered,' he said, adding that over 60% of that growth is already locked in through signed deals. The REIT is projecting a starting yield of 7.2%, which it expects to rise to 7.7% or higher in the years ahead. Combine that with targeted annual growth of 13% in cash flows, and you're looking at a potential total return of 14–15%. That's what makes the proposition tempting, especially in this market where safe, predictable returns are hard to come by. Another point worth noting is KRT's relatively low debt level. With a Loan-to-Value (LTV) ratio of just 19%, the REIT has significant headroom to raise capital and acquire new assets — without diluting returns. This could be a real advantage in a competitive market where prime office properties are becoming harder to come by. Interestingly, KRT is positioning itself as India's first brand-agnostic REIT, open to acquiring high-quality assets from smaller developers and HNIs looking to monetise commercial properties without giving up their own branding. Sattva Group, the equal partner in Knowledge Realty Trust has already moved nearly 50% of its portfolio into the REIT and committed four additional buildings under ROFO (right of first refusal) agreements. But the real momentum, it appears, will come from this inclusive strategy. As Bijay Agarwal, Managing Director of Sattva Group puts it: 'This is strategy is designed to unlock value for developers and HNIs who've built commercial assets but lacked a clear, tax-efficient exit. It allows them to retain their own branding while benefiting from the institutional structure, stability, and yield of a REIT. That's the real differentiator.' That said, if Sattva and Blackstone were to move their own assets into KRT: will valuations be fair and add value for unitholders? Here too, the management's answer is measured. Godbole insists that the REIT will be disciplined in acquisitions, use third-party valuers, and ensure every deal adds to distributions per unit (DPU). With both Sattva Group and Blackstone holding substantial stakes, there is a system of checks and balances. 'We're here for the long run,' Ashish Mota said, emphasising Blackstone's decade-plus belief in India's office story. And that story is indeed powerful. India is now the GCC capital of the world, with a 58% global share. What began as back-end support has evolved into high-value functions in AI, robotics, design and digital transformation, with its vast English-speaking STEM qualified workforce. Office demand continues to be driven by this shift. Add to that India's unbeatable cost advantage: top-grade office rents in cities like Bengaluru, Hyderabad and Mumbai average $1–3 per square foot per month — versus $7–9 in London or $10–14 in midtown Manhattan. So yes, there's momentum behind India's office REITs. And on paper, KRT has the right ingredients to do well by your investment. If you're after long-term, stable income go ahead, apply to the IPO.
News18
3 hours ago
- Business
- News18
Sattva-Blackstone backed KRT sets REIT IPO price band at Rs 95-100 per unit
Mumbai, Jul 30 (PTI) Knowledge Realty Trust, sponsored by realty firm Sattva Group and Blackstone, on Wednesday fixed a price band of Rs 95 to Rs 100 per unit for its Rs 4,800 crore REIT initial public offering. The issue will open from August 5-7, Knowledge Realty Trust said in a statement. This initial public offering (IPO) comprises a fresh issuance of units up to Rs 4,800 crore by Knowledge Realty Trust In early March, KRT filed the draft red herring prospectus (DRHP) with Sebi to launch an IPO and list the REIT on stock exchanges. This is part of a strategy to monetise its 30 prime office assets across major cities. Initially, the company planned to raise a total of Rs 6,200 through a public issue. Last month, it raised Rs 1,400 crore from investors. Accordingly, the issue size has been reduced to Rs 4,800 crore. KRT is set to become India's largest REIT by gross asset value (around Rs 62,000 crore). Its net operating income stood at Rs 3,432 crore in the previous financial year. KRT owns over 46 million sq ft of office assets across 29 assets in six cities, primarily Mumbai, Bengaluru, and Hyderabad. The assets include One BKC and One World Center in Mumbai, Knowledge City, and Knowledge Park in Hyderabad and Cessna Business Park and Sattva Softzone in Bengaluru. Blackstone and Sattva will continue to own about 80 per cent of the REIT. Apart from Nexus Select Trust, the other three REITs are backed by rent-yielding office assets. Nexus owns a large portfolio of retail real estate spaces. Bengaluru-based Sattva Developers has so far constructed 74 million sq ft across seven Indian cities in commercial, residential, co-living, co-working, hospitality, and data centre sectors. An additional 75 million sq ft is in the planning and implementation stage. Blackstone, one of the leading global investment firms, has a huge exposure in the Indian real estate market. The two sponsors have decided to adopt a brand-neutral strategy to grow the KRT portfolio inorganically through third-party acquisitions. The existing four REITs have a combined portfolio of over 126 million sq ft of Grade A office and retail space across the country. Since their inception, these REITs have collectively distributed over Rs 21,000 crore to unitholders. PTI SP MJH SP SHW view comments First Published: July 30, 2025, 14:15 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Mint
2 days ago
- Business
- Mint
Blackstone-backed Knowledge Realty Trust's ₹4,800-crore IPO to open on 5 August
Next Story Madhurima Nandy The Sattva Group and Blackstone-backed real estate investment trust will announce the price band on 30 July. Some of the marquee assets owned by Knowledge Realty Trust include One BKC and One World Center in Mumbai, Knowledge City and Knowledge Park in Hyderabad and Cessna Business Park and Sattva Softzone in Bengaluru. Gift this article BENGALURU :Knowledge Realty Trust (KRT), a real estate investment trust (Reit) sponsored by Bengaluru-based developer Sattva Group and asset manager Blackstone, is set to launch its initial public offering (IPO) on 5 August, said two persons close to the development. Knowledge Realty Trust (KRT), a real estate investment trust (Reit) sponsored by Bengaluru-based developer Sattva Group and asset manager Blackstone, is set to launch its initial public offering (IPO) on 5 August, said two persons close to the development. The proposed ₹ 4,800-crore IPO secured approval from the Securities and Exchange Board of India (Sebi) on Friday. The offer will be open from 5 to 8 August. This will be Asia's second-largest Reit by size and India's largest by gross asset value (around ₹ 62,000 crore) and net operating income, owning over 46 million square feet of office space across 29 assets in six cities, mainly Mumbai, Bengaluru, and Hyderabad. 'The price band will be announced on 30 July. The Reit will be listed in mid-August," said one of the two persons cited above, on the condition of anonymity. In June, KRT became the first ever Reit to conclude a pre-IPO fundraising exercise. It raised ₹ 1,400 crore from investors, including JM Financial, Radhakishan Damani (promoter of DMart), and 360 One Wam Ltd, in a pre-IPO placement. The round was fully subscribed by domestic high-net-worth individuals (HNIs) and family offices, signalling investor confidence ahead of the public issue. 'A substantial amount of the total ₹ 6,200 crore primary raise will be used for debt repayment. There will be no secondary sale," said the second person. A KRT spokesperson didn't respond to Mint's queries. The KRT IPO KRT filed its IPO draft papers with Sebi in March. Blackstone—sponsor of three of the four listed Reits in India—will own 55% of the Reit, while the Sattva Group will hold the rest. The KRT Reit has a 'brand neutral' strategy. It aims to acquire assets inorganically and give opportunities to other developers to contribute their assets to the Reit while maintaining their brand identity. Shirish Godbole, former managing director of Morgan Stanley Real Estate Funds in India, is the trust's chief executive officer; Quaiser Parvez, former CEO of Blackstone-owned Nucleus Office Parks, is its chief operating officer. Reits have faced their share of challenges in recent years, many of them pandemic-induced. But with the office market turning around, they are gaining more acceptance. Around 90% of the Sattva-Blackstone Reit is leased to marquee tenants, split between multi-national corporations and global capability centres (GCCs). Also Read | KKR-backed Leap India appoints bankers for IPO Some of the marquee assets owned by the Trust include One BKC and One World Center in Mumbai, Knowledge City and Knowledge Park in Hyderabad and Cessna Business Park and Sattva Softzone in Bengaluru. Topics You May Be Interested In Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Mint
2 days ago
- Business
- Mint
Knowledge Realty Trust's Rs4,800-crore IPO to open on 5 August
BENGALURU : Knowledge Realty Trust (KRT), a real estate investment trust (Reit) sponsored by Bengaluru-based developer Sattva Group and asset manager Blackstone, is set to launch its initial public offering (IPO) on 5 August, said two persons close to the development. The proposed ₹4,800-crore IPO secured approval from the Securities and Exchange Board of India (Sebi) on Friday. The offer will be open from 5 to 8 August. This will be Asia's second-largest Reit by size and India's largest by gross asset value (around ₹62,000 crore) and net operating income, owning over 46 million square feet of office space across 29 assets in six cities, mainly Mumbai, Bengaluru, and Hyderabad. 'The price band will be announced on 30 July. The Reit will be listed in mid-August," said one of the two persons cited above, on the condition of anonymity. In June, KRT became the first ever Reit to conclude a pre-IPO fundraising exercise. It raised ₹1,400 crore from investors, including JM Financial, Radhakishan Damani (promoter of DMart), and 360 One Wam Ltd, in a pre-IPO placement. The round was fully subscribed by domestic high-net-worth individuals (HNIs) and family offices, signalling investor confidence ahead of the public issue. 'A substantial amount of the total ₹6,200 crore primary raise will be used for debt repayment. There will be no secondary sale," said the second person. A KRT spokesperson didn't respond to Mint's queries. The KRT IPO KRT filed its IPO draft papers with Sebi in March. Blackstone—sponsor of three of the four listed Reits in India—will own 55% of the Reit, while the Sattva Group will hold the rest. The KRT Reit has a 'brand neutral' strategy. It aims to acquire assets inorganically and give opportunities to other developers to contribute their assets to the Reit while maintaining their brand identity. Shirish Godbole, former managing director of Morgan Stanley Real Estate Funds in India, is the trust's chief executive officer; Quaiser Parvez, former CEO of Blackstone-owned Nucleus Office Parks, is its chief operating officer. Reits have faced their share of challenges in recent years, many of them pandemic-induced. But with the office market turning around, they are gaining more acceptance. Around 90% of the Sattva-Blackstone Reit is leased to marquee tenants, split between multi-national corporations and global capability centres (GCCs). Some of the marquee assets owned by the Trust include One BKC and One World Center in Mumbai, Knowledge City and Knowledge Park in Hyderabad and Cessna Business Park and Sattva Softzone in Bengaluru.
Time of India
2 days ago
- Business
- Time of India
Knowledge Realty Trust gets Sebi nod to launch ₹4,800-crore REIT-IPO
NEW DELHI: Knowledge Realty Trust , sponsored by realty firm Sattva Group and Blackstone , has got Sebi approval to launch its REIT public offering to raise Rs 4,800 crore fund. Last month, Knowledge Realty Trust (KRT) had raised Rs 1,400 crore from investors ahead of its maiden REIT public issue. In early March, the KRT filed the draft red herring prospectus (DRHP) with Sebi to launch an initial public offering (IPO) and list the REIT on stock exchanges. This is part of a strategy to monetise its 30 prime office assets across major cities. According to sources, KRT received Sebi approval to launch its REIT-IPO, which is scheduled to hit the capital markets in the first week of August. The company plans to raise Rs 4,800 crore through the public issue as it has already raised Rs 1,400 crore from investors, they added. Sattva Group spokesperson declined to comment. The company will start the roadshow this week, and the price band is likely to be announced on August 30. KRT is set to become India's largest REIT by gross asset value (around Rs 62,000 crore). Its net operating income stood at Rs 3,432 crore in the previous fiscal year. The KRT owns over 46 millions sq ft of office assets across 29 assets in six cities, primarily Mumbai, Bengaluru, and Hyderabad. The assets include One BKC and One World Center in Mumbai, Knowledge City, and Knowledge Park in Hyderabad and Cessna Business Park and Sattva Softzone in Bengaluru. Blackstone and Sattva will continue to own about 80 per cent of the REIT. At present, there are four listed REITs in India -- Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, and Nexus Select Trust. Apart from Nexus Select Trust, the other three REITs are backed by rent-yielding office assets. Nexus owns a large portfolio of retail real estate spaces. Bengaluru-based Sattva Developers has so far constructed 74 million sq ft across seven Indian cities in commercial, residential, co-living, co-working, hospitality, and data centre sectors. An additional 75 million sq ft is in planning and implementation stage. Blackstone, one of the leading global investment firms, has a huge exposure in the Indian real estate market. The two sponsors have decided to adopt brand brand-neutral strategy to grow the KRT portfolio inorganically through third-party acquisitions. The existing four REITs have a combined portfolio of over 126 million sq ft of Grade A office and retail space across the country. Since their inception, these REITs have collectively distributed over Rs 21,000 crore to unitholders.
