From ET Realty
NEW DELHI: Blackstone Group, the world’s biggest private equity real estate investor, and Bengaluru based developer RMZ Corp could be the first companies to list their real estate investment trusts (REITs), according to Business Standard newspaper.
Finance minister Arun Jaitley had cleared the final roadblock for REITs by exempting it from the dividend distribution tax (DDT) in Budget 2016-17 on Monday.
REITs involve pooling of funds from investors to invest solely in rent generating real estate properties and other permissible areas. Listing commercial properties on REITs will allow builders to raise cheaper capital and also offer an opportunity for retail investors to participate in India’s growing commercial realty market.
Embassy Office Parks, a joint venture between Blackstone Group and Bengaluru-based Embassy Group, had planned for a $2 billion REIT in India, but kept it on hold because of lack of clarity on the taxation front.
Blackstone concluded some of the major office property transactions in 2015, including buyout of Gurgaon-based builder Alpha G: Corp for Rs 1,600 crore and acquisition of 247 Park for Rs 1,050 crore.
Family-owned RMZ Corp is also on a office asset buyout mode and is in talks with sovereign and pension funds to raise $500 million for its expansion plans. The company recently bought Equinox Business Park with saleble area of 1.25 million sq ft in Mumbai’s Bandra-Kurla Complex from Essar Group for about Rs 2,400 crore. The company has also acquired an 800,000 sq ft IT park in Gurgaon from real estate developer BPTP for about Rs 850 crore.