Blackstone to Divest 330 Million Units in Nexus Select Trust for Rs.4,500 Crore

Global investment firm Blackstone has announced that it is set to sell 330 million units of its REIT firm, Nexus Select Trust, in a block deal valued at nearly Rs.4,500 crore, according to the reports. The transaction is expected to take place today at a floor price of Rs.135 per unit, marking a 6.3% discount to Nexus Select Trust’s closing price yesterday.

Stake Reduction

Blackstone currently holds a 43.1% stake in Nexus Select Trust, which is India’s first retail property-backed real estate investment trust (REIT). Post-transaction, Blackstone’s stake will be reduced to 21.3%, down from 43.1% as of June 30, 2024. This divestment of a 21.8% stake through the block deal is part of Blackstone’s plans to monetize its investments in the Indian real estate sector.

Lock-In Periods

Following this deal, Blackstone will face a statutory lock-in period for 15% of its remaining stake until May 2026. Additionally, the company has agreed to a voluntary lock-in period for the remaining 6.3% of its stake for nine months, as per the reports.

Nexus Select Trust Portfolio

Nexus Select Trust’s portfolio includes 17 shopping malls spread across 14 cities in India, with a gross leasable area of 9.9 million square feet. The portfolio also features two hotel assets comprising 354 keys and three office assets with a gross leasable area of 1.3 million square feet. The trust’s retail real estate assets house over 1,000 domestic and international brands across approximately 3,000 stores.

Financial Performance

For the June quarter, Nexus Select Trust reported a 7% increase in net operating income (NOI) at Rs.412.7 crore. Retail NOI for Q1FY25 stood at Rs.371.9 crore, up 8% year-on-year. The company has also announced plans to raise up to Rs.1,700 crore through the issuance of commercial papers and debentures.

Conclusion: In conclusion, Blackstone’s decision to sell a major stake in Nexus Select Trust showcases its plans to unlock value in India’s real estate market. While this step reduces Blackstone’s ownership, it aligns with their broader investment goals. Meanwhile, Nexus Select Trust’s portfolio and financial growth continue to cement its position as a retail REIT in India.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.