The Brookfield REIT is India’s only institutionally managed public commercial real estate vehicle. Sponsored by an affiliate of Brookfield Asset Management (“BAM”), one of the world’s largest alternative asset managers with approximately US$550 billion in assets under management, as of June 30, 2020, our goal is to be the leading owner of high quality income producing commercial real estate assets in key gateway Indian markets, which have significant barriers to entry. Over the last two decades, India has emerged as a leading hub for technology and corporate services due to a highly skilled and young workforce and a distinct competitive cost advantage. With approximately 90 million people expected to be added to the workforce by 2030, this structural driver will further increase office absorption, creating compelling opportunities across the commercial real estate market in India. The global spending on software and IT services is expected to grow at a robust rate between FY 2020 and FY 2025 and the technology industry in India is expected to grow at a CAGR of 13% to US$350 billion by FY 2025 from an estimated US$191 billion in FY 2020 due to the large STEM talent pool, competitive cost advantage and favorable demographics in the country. Our strategy is to address this demand by owning and operating large 'fully-integrated', 'campus-format' office parks in established locations, and providing a complete ecosystem to our tenants and their employees. We intend to leverage Brookfield Group’s real estate holdings in India by entering into agreements that provide options to acquire their existing properties in our markets. We have the exclusive right and option at our discretion to acquire the Call Option Properties, one office park in each of Gurugram and Noida, similar to the office parksin the Initial Portfolio, that are near-stabilization and currently owned by members of the Brookfield Group. TheCall Option Properties encompass 8.3 msf, comprising of 5.7 msf of Completed Area (96% occupied), 1.7 msf ofUnder Construction Area expected to be completed by September 2021 and 0.8 msf of Future DevelopmentPotential. Our Initial Portfolio combined with the Call Option Properties forms our “Pro Forma Portfolio”,aggregating to 22.3 msf. The Call Option Properties provide visibility of near-term external growth potential forus and will also further help us improve our market leadership in Gurugram and Noida. The Call Option Properties have the potential to contribute ?6,372 million in NOI in FY 2023 (including MIOP), and can further increase theNOI for FY 2023 by 78% from ?8,142 million to ?14,514 million. In India, we have our presence since 1997. Our dedicated and experienced professionals provide qualityservices from 7 offices across India (Mumbai, Bengaluru, Chennai, Kolkata, Gurugram, Hyderabad and Pune).We have a strong team of experienced and qualified professionals dedicated to offer Valuation & Advisory services in various locations across the country. C&WI utilizes internationally accepted valuation techniques customized to Indian context based on best practices in the Industry.Multi-national corporations like Barclays, Bank of America Continuum, RBS, TCS, Cognizant, and Accenture are some of the clients of Brookfield India Real Estate Trust. Competitive Strengths 1. Global Sponsorship with Local Expertise.2. Difficult to Replicate, Dominant and Strategically Located Properties.3. Placemaking Capabilities4. Significant Identified Internal and External Growth Opportunities.5. Institutional Corporate Governance Framework and Strong Alignment of Interests. As per financial performance, Brookfield India Real Estate Trust has posted total income/net profits of Rs. 866.25 cr. / Rs. 161.14 cr. (FY18), Rs. 929.83 cr. / Rs. (15.65) cr. (FY19) and Rs 381.39 cr / Rs 15.14 cr (FY20). For upto H1 of FY21, company has posted profit of Rs 30.08 Cr on total revenue of Rs 329.50 Cr. So company has shown average performance. Stove kraft limited has posted an average EPS of Rs. (0.21) and average RoNW of 1.46% for last three fiscals. Issue is priced at a P/BV of 7.42 as per NAV of 51.89 on 30.09.20. As per FY20 earnings, P/E is around 430. If we attribute latest annualised earnings of FY21 on fully diluted equity post issue, then asking price is at a P/E of around 21. As per RHP, comparison between the listed peers are shown in above table. On BRLM's front, two BRLMs are associated with this IPO, and have handled around 20 IPOs in last three fiscals, and from last 10 IPOs, 5 opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 10 IPOs, 1 is trading below issue price and remaining are trading above issue price. ( As on 19.01.2021 ) As per financials, results are average and issue looks aggressively priced with respect to latest negative earnings of H1 FY21. Post pandemic, we may see change in working style of different companies, may have some permanent effect and this may have adverse effect on rent / leasing business in India. So, we give AVOID rating to this IPO.
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