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:
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.
About the issue
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.