Market Brief: Bagmane REIT Public Offering Bagmane Prime Office REIT, a Bengaluru-focused commercial real estate vehicle, is preparing to launch a significant **₹4,000 crore** Initial Public Offering (IPO). This move follows the filing of a Draft Red Herring Prospectus (DRHP) and indicates strong confidence in the Indian office sector despite a subdued start to the 2026 primary market. The proposed offering is structured to raise **₹3,000 crore** through a fresh issue of units, alongside an Offer for Sale (OFS) of **₹1,000 crore** by a selling unitholder. Blackstone, which holds a minority pre-IPO stake, remains a key institutional backer. Market reports suggest the REIT is targeting an overall valuation of approximately **$3.9 billion**. Portfolio and Performance The REIT’s portfolio is concentrated in Bengaluru’s high-growth micro-markets. As of mid-2025, the assets comprised six Grade A+ business parks covering **20.3 million square feet**. The operational stability of these assets is reflected in a committed occupancy rate of **97.9%**. Key portfolio metrics include: * **Gross Asset Value (GAV):** ₹38,790 crore. * **WALE:** A weighted average lease expiry of **7.3 years**. * **Mark-to-Market Potential:** An estimated **20.3%** upside on rentals for leases expiring through 2030. * **Projected Income:** Net Operating Income (NOI) is forecast at **₹2,670 crore** for FY2027. The tenant base is notably resilient, with roughly **99%** of gross contracted rentals sourced from multinational corporations and Global Capability Centres (GCCs). Strategic Use of Funds A substantial portion of the IPO proceeds is earmarked for strategic acquisitions to expand the leasable footprint. The REIT plans to deploy **₹1,775 crore** to acquire Luxor at Bagmane Capital Tech Park and **₹1,025 crore** to secure a **93% stake** in the entity owning Bagmane Rio Business Park. Following the listing, the REIT’s financial profile is expected to remain conservative. The Loan-to-Value (LTV) ratio is projected to decline to approximately **7%**, providing significant headroom below the regulatory cap of **49%**. Sector Trends The Indian REIT market is witnessing a shift toward scale and diversification. Market capitalization for the sector surpassed **₹1.6 lakh crore** in early 2026, driven by consistent distribution yields. For Q2 FY26, listed REITs are expected to distribute approximately **₹2,331 crore** to over **3.3 lakh unitholders**. Bengaluru continues to lead office supply in the Asia-Pacific region, with **12.1 million square feet** expected to come online in 2026. This supply is being met by robust demand, particularly as corporates enforce stricter office attendance mandates and global firms continue to view India as a primary talent hub for multi-functional growth.