Bagmane Developers Pvt Ltd, a major player in Bengaluru’s commercial real estate market, has opened talks with investment banks for a REIT IPO of its office parks, sources have told Moneycontrol.
Bagmane, which has 30 million square feet of operational office space, plans to raise around Rs 4,000 crore through the initial public offering, the sources added.
“They have been engaged in discussions with investment banks for the IPO of their office parks and the banker syndicate is expected to be finalized in the coming weeks,” one of the sources cited above said.
This will be the fifth office real estate investment trust in the Indian market after Embassy, Mindspace, Brookfield and Blackstone-backed Sattva group’s Knowledge Realty Trust, which filed its DRHP earlier this year.
The Knowledge Realty Trust plans to raise Rs 6,200 crore via IPO, the biggest REIT offer, so far.
The three listed office REITs have delivered strong returns this year, with the Mindspace Business Parks stock gaining 16.2 percent, Brookfield India Trust 12.9 percent and Embassy Office Parks 8.7 percent.
Emails sent to Bagmane Group did not elicit a response till the time of publication. Blackstone declined to comment.
Bagmane has a portfolio of around 30 million sq feet of operating office properties with an active pipeline of around 5 million sq ft. The company also has a land bank with a development potential of 31 million sq ft of commercial properties.
“Most of the existing operational office properties are expected to be part of the REIT along with the current under-construction projects. IPO proceeds will be used for part or full repayment of certain debts of the office properties that will form part of the REIT,” a second source said.
In December, Blackstone picked up a minority stake in two group entities — Bagmane Developers and Bagmane Rio. Financial details of the investment were not disclosed.
Apart from the Brookfield India, all other REITs, so far, in India have been backed by Blackstone.
Bagmane portfolio
Founded in 1996, Bagmane Group is a significant presence in the Bengaluru office properties market, focusing on business parks and office spaces primarily for technology, IT/ITeS, and global enterprise clients. Tenants in Bagmane’s office parks include PwC, Dell, Boeing, Cisco, Google, Accenture, Samsung, Amazon, GSK, Microsoft and American Express.
One of its earliest IT parks — Bagmane Tech Park — is in East Bengaluru and was launched in 2001 with over 4.7 million sq ft in a 42-acre campus.
The Bagmane World Technology Centre on Bengaluru’s Outer Ring Road is another flagship campus. It was set up in 2007 with 4.5 million sq ft of office space.
Other major office properties of the group include Bagmane Constellation Business Park (Outer Ring Road, 5.3 million sq ft); Bagmane Capital, an under-development project with total capacity of 10.5 million sq ft; Bagmane Solarium City (Whitefield, 10.5 million sq ft) and Bagmane Sierra Business District, an under-construction property in Yelahanka.
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