Last updated: 03 Feb, 2021 | 10:11 am
Brookfield REIT is set to raise up to ₹3,800 crore via IPO which opens on 03rd February, Wednesday. Here are the details:
About Brookfield REIT
How does Brookfied REIT operate?
Objective of Company
The primary objective of company’s strategy is to provide attractive risk-adjusted total returns to its Unitholders derived from:
Peer Comparison
Brookfield REIT has mentioned Embassy Office Parks and Mindspace REIT as its listed peers. Both of these are quoting at a discount to their NAV. In case of Brookfield REIT, the issue is priced at Rs 275 per unit, which is a 11.6% discount to the NAV. NAV is calculated based on assumptions of cash flows (from rentals) and other income for the REIT.
Financials
About the issue
INDmoney Recommendation
The issue is priced at a discount of 11% to its NAV, as compared to a 5.3% discount in case of Embassy Office Parks and a 3% discount in case of Mindspace Business Park REIT. This seems to be reasonable.
At the higher end of the price band at ₹275, the pre-tax yield indicative yield is around 7.95% in FY22. While this seems attractive, there are risks associated with investing in Commercial Real Estate. The company’s financials have also taken a hit in Apr-Sep 20 period. As work -from-home gains traction the demand for commercial real estate may remain subdued in the medium-term. Given these factors, we remain ‘Neutral’ on the prospects of the issue.