Embassy Office Parks Reit makes stock market debut, gains nearly 5%

The units of Embassy Office Parks Real Estate Investment Trust (Reit) gained nearly 5 per cent during their stock market debut. Experts said the positive listing would help in opening of a new fundraising avenue for the cash-strapped real estate sector in the country. Last month, Blackstone-backed Embassy Office came out with India’s first REIT initial public offering (IPO) to raise Rs 4,750 crore. Investors were allotted units at Rs 300 apiece in the IPO.

Embassy Reit units closed at Rs 314, up 4.7 per cent over the issue price. The Reit units touched a high of Rs 325 and a low of Rs 308 on the National Stock Exchange (NSE), where Rs 91 crore worth of units got traded. Another Rs 9 crore worth of units changed hands at the BSE, where the Reit hit a high of Rs 325 and a low of Rs 300.

“The positive listing demonstrates the demand for India’s maiden Reit,” said Shishir Baijal, managing director, Knight Frank India. “We expect this momentum to sustain in the near future which would encourage more participants to enter the Reit market, which in turn will improve the fund flow into the realty sector.”

Gaurav Dua, head research, Sharekhan expects successful IPO and listing of India’s first Reit to boost listed real estate stocks as well.

“We expect a slew of Reit offerings yields to hit the market in the coming months. Ability to raise resources through monetization of rent-yielding properties at a relatively attractive cost is a re-rating trigger for not only the Reit-issuing real estate companies but also boost investor sentiment towards the entire sector,” said Dua.

The BSE Realty index, a gauge for the performance of realty sector, fell 0.8 per cent on Monday. In comparison, the benchmark Sensex gained 0.5 per cent. Last month, the BSE Realty index had rallied 16 per cent, two times that of Sensex.

Embassy Reit owns and operates nearly 25 million square feet of commercial real estate in metros such as Bengaluru, Pune, Mumbai and Delhi. Some of its tenants include Microsoft, JP Morgan, IBM and Rolls-Royce.