India's Largest REIT Plans $181 Million Debut Rupee Bond Sale

Knowledge Realty Trust, India’s largest REIT, plans to raise as much as 16 billion rupees ($181 million) in the onshore market through its first ever bond sale, according to people familiar with the matter.

The REIT, backed by Blackstone Inc. and Indian developer Sattva Developers Pvt., plans to issue a three-year note, the people said, asking not to be identified discussing private information. The bond will carry a coupon of 7.2%, payable quarterly, and Barclays Plc is arranging the issuance, they said.

REITs are gaining popularity in India as investment pours into the nation’s booming commercial real estate market. A recent reclassification of the sector by the securities regulator further boosted the prospects for the industry. Avendus Capital expects REITs to expand and double their assets under management to $200 billion by the end of the decade.

Knowledge Realty Trust last month also debuted in the equity markets with an initial public offering of about 48 billion rupees. The REIT holds real estate assets like offices and business parks across six Indian cities and had a gross asset value of 620 billion rupees as of late March, according to its website.

Representatives at Knowledge Realty Trust and Barclays declined to comment.

The proposed bond is Knowledge Realty Trust’s first local currency note, according to Bloomberg compiled data, and carries a AAA rating with stable outlook from Crisil Ratings and ICRA.