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Blackstone picks banks for US$1b India Reit: sources

Mumbai

BLACKSTONE Group, the world's largest alternative asset manager, has picked banks for India's first real estate investment trust listing, sources said.

The US company and local partner Embassy Group selected firms including Bank of America Corp, Morgan Stanley, Kotak Mahindra Bank and JPMorgan Chase & Co, said the sources. The Reit listing would raise about US$1 billion, the people said, adding that Axis Bank, Deutsche Bank, HSBC Holdings and JM Financial have also been picked for the transaction.

A successful deal could encourage new offerings from India's cash-starved property firms, which are still recovering from sweeping policy changes and struggling to access liquidity. The Blackstone Reit, which comprises properties that count Microsoft Corp and Rolls-Royce Holdings as tenants, would also be a crucial test after much-hyped infrastructure trusts failed to gain traction in the Indian market.

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"A good debut for the Blackstone-Embassy issue could quicken potential offerings by the likes of Xander Group, Brookfield, CPPIB and IIFL Holdings which are holding high-quality realty assets," said Amit Goenka, Mumbai-based managing director of Nisus Finance Services Ltd. "Even if only one-fourth of the high-grade, yield-generating commercial properties are moved into trusts, we will have a US$50 billion Reits market in India in a few years." He was referring to the Xander Group Inc, Brookfield Asset Management Inc, Canada Pension Plan Investment Board and IIFL Holdings Ltd.

Blackstone will look to file the prospectus with the capital market regulator in August, one source said. The Reit will include properties from the Embassy Group joint venture as well as from Blackstone's own portfolio. BLOOMBERG