Nexus Select Trust REIT IPO

Nexus Select REIT is one of India's leading consumption centre platform providers and owners of high-quality consumption centre infrastructure assets. The REIT’s portfolio consists of 17 Grade-A urban consumption centres in 14 leading cities with a total leasable area of 9.2 million square feet.

Nexus Select Trust primarily deals with consumption centres. It holds the largest consumption centres’ portfolio in India, with an average of 96.2% committed occupancy as of December 31, 2022. Their tenant base consisted of 1,044 domestic and 2,893 international brand stores during the same time period.

Nexus Select is backed by Blackstone, the world's largest alternative asset manager, with investments across industries.

Nexus Select Trust REIT IPO Details

Nexus Select Trust REIT is India’s first REIT to launch an initial public offering (office assets back the other three listed REITs). The total issue size of Rs. 3,200 crore consists of Rs. 1,400 crore and an offer for sale of Rs. 1,800 crore.

Nexus Select Trust REIT IPO is a book-building type IPO that will open on both BSE and NSE. The Nexus Select Trust REIT IPO date is fixed for May 9–11, 2023, for investors to submit their bid applications.

The IPO will list on the bourses on May 19, 2023.

Nexus Select Trust REIT IPO Objective

The net proceeds from the fresh issues will be utilised for

• Partial or full repayment of certain market borrowings of the Asset SPVs and the investment entities
• Acquisition of stakes and dissolving certain debt securities for the asset SPVs
• General corporate purposes

Should you invest in Nexus Select Trust REIT?

Here are the top reasons to consider before investing in the IPO:

• Its commercial spaces are located in prime cities like Delhi, Bengaluru, Pune, Hyderabad, Navi Mumbai, etc.
• India’s retail commerce is expected to grow steadily (both brick-and-mortar and online), supported by rapid urbanization and the rising purchasing power of the growing middle class.
• It offers a mixed portfolio of assets, including two complimentary hotels and three office assets.

Competitive Peers

There is no listed retail REIT in India.

Noteworthy Highlights of Nexus Select Trust REIT

• The company enjoyed 11% growth (CAGR) between FY18 and FY20 in tenant sales in its properties, where marginal rent across its portfolio grew at a 7.5% CAGR from CY16 to CY19.
• It offers a well-diversified portfolio of assets, with no single asset or tenant contributing more than 18.3% or 2.8% of the total gross rentals, respectively.

Nexus Select Trust REIT Company Financials

Know before investing

Strengths

1. It holds the largest portfolio of consumption centers, with an average occupancy of 96.2%.

2. Its business is supported by a healthy mix of tenants.

3. A highly stabilised portfolio of assets, positioned for solid organic growth.

Risks

1. Interested investors should understand the business patterns of REITs before investing.

2. The company may obtain external debt post-IPO to repay certain indebtedness.

3. Its debt situation can significantly impact the company’s cash flow.