Property Share Investment Trust IPO: Key strengths and risks from RHP you need to know

Property Share Investment Trust IPO: The real estate investment trust (REIT) IPO of Property Share Investment Trust (PropShare Platina IPO), which is India's first registered Small and Medium Real Estate Investment Trust (SM REIT), will be open from December 2 to December 5. With a price range of ₹10 lakh to ₹10.5 lakh per unit, the IPO is completely a fresh issue worth ₹353 crore. As the IPO is less than a week away, here are the key strengths and risks you need to know.

Property Share Investment Trust IPO: Risks

• Revenue, cash flow, and financial conditions may be impacted by low occupancy and rent levels in its commercial office spaces.
• Any future proposal to upgrade existing projects in special purpose vehicles (SPVs) can expose risks and uncertainties.
• Tenant leases across SPVs may be affected by defaults, non-renewals, early terminations, adequate stamp duty payments, regulatory changes or legal proceedings.
• Property Share Investment Trust may face risks inherent in acquiring ownership interests in properties that are part of a larger development or share common areas.
• The business might be impacted if the Indian real estate market weakens.
• Exposed to risks associated with safety, security and crisis management.

Property Share Investment Trust IPO: Strengths

• Grade A, LEED Gold asset built by The Prestige Group, one of India's leading developers.
• Located on Bangalore's Outer Ring Road, which is among the key office markets.
• 100% proposed lease to the United States-based technology company.
• Cash flows linked to inflation with contracted escalations under the proposed lease every three years.
• Improved connectivity with the upcoming metro line.

The IPO proceeds will be used to acquire Prestige Tech Platina assets by the Platina SPVs.

Kunal Moktan, Director of Property Share, said, "We believe SM REITs like PropShare Platina provide investors with an alternative asset class with hybrid returns in the form of regular rental yields and capital appreciation of the underlying real estate."

The sole lead manager to the offer is ICICI Securities.