Bagmane targets FY27 net operating income of Rs 2,700 cr, highlights low debt, rentals upside: Sources

The portfolio has a GAV of Rs 39,000 crore

Bengaluru-based developer Bagmane Group, which is slated to file draft papers for its first real estate investment trust (REIT), Bagmane Prime Office REIT, is expecting its net operating income for FY27 to be around Rs 2,700 crore, with significant upside seen due to a large number of properties- around 47 million square feet in 11 assets, under right of first refusal, market sources stated.

The REIT, which has been backed by private equity major Blackstone, has a gross asset value of around Rs 39,000 crore. Sources pointed out that the REIT's loan-to-value ratio of 7 percent, as well as a weighted average lease expiry (WALE) of 7.3 years, signifies a light balance sheet and stability in cash flows, as does a mark-to-market potential of 20 percent upside in rentals of existing leases.

The REIT platform will be led by CEO Richard Hugh Andrew, who was part of large funds such as BlackRock, with the sponsors to be represented by Raja Bagmane, Shashank Bagmane and Aditya Bagmane.

Moneycontrol reported earlier on December 30 that the unlisted Bagmane Group is planning to raise around Rs 4,000 crore through the initial public offering of its REIT platform. The REIT currently has six properties in Bengaluru with 20 million square feet in its portfolio, of which around 4 million square feet is under construction. Two hotels currently under development with 607 keys, and 164 MW in solar power capacity is also expected to be part of the REIT.

If listed, Bagmane Prime Office REIT will become the fifth predominantly-office REIT, and also the fifth REIT backed by Blackstone. Since their respective listings, Blackstone has exited two REITs that it had earlier backed- Embassy Office Parks REIT and Mindspace Business Parks REIT. The US based fund also sponsors India's only retail REIT- Nexus Select Trust.