India’s fourth biggest realty company (by market cap) Indiabulls Real Estate (IBREL) on Tuesday said that it was planning to launch an initial public offering (IPO) for its property trust Indiabulls Properties Investment Trust (IPIT) on the Singapore Stock Exchange (SGX).

Indiabulls’ plan comes close on the heels of the country’s first and second biggest property developers DLF and Unitech announcing real estate investment trusts (REITs) on SGX.

IBREL said it got the ‘eligibility to list’ permission from the board of SGX on Tuesday.

According to Ajith Mittal, president, corporate affairs, Indiabulls Group, the company’s IPO would hit the market by mid-March. Though Mittal was silent on the issue size, market sources said Indiabulls would make a total offer of nearly $1.2 billion (Rs 4,080 crore).

IPIT will acquire One Indiabulls Centre and Elphinstone Mills, developed and owned by Indiabulls Properties Pvt Ltd (IPPL) and Indiabulls Real Estate Company Pvt Ltd (IRECPL) respectively. These two properties are held by IBREL through investments in IPPL and IRECPL, the company said.

IBREL is going to offload 14 per cent stake in the two projects via the IPO and mop up nearly $250 million (Rs 1,000 crore). The two properties are valued at over $2.2 billion (Rs 8,080 crore).

The company is planning to submit the final prospectus by March end. Indiabulls holds 40 per cent stake in the projects and its stake is valued at nearly $1 billion.

"Indiabulls will hold the 26 per cent stake in the properties at least for one year and then take a call on future trading," sources said.

"We are planning to lodge the final documents two weeks from now and hit the market in March. The total offering will depend on the call taken by other investors and market volatility," said Mittal.

US hedge fund Farallon Capital and London Stock Exchange Alternative Investment market (AIM)-listed Dev Property Developer are 60 per cent stakeholders in these two projects.

One Indiabulls Centre has 1.5 million sq ft of commercial space and 0.5 million retail space in Parel area of Mumbai. Elphinstone Mill has 1.4 million sq ft of leasable space.

According to estimates, Indian real estate developers may raise nearly $20 billion from SGX in the next two years. According to analysts, realty majors are thronging SGX due to various reasons, including proximity to Singapore, lower return expectations of the investors, easy listing norms and absence of REITs in India.

"While we have to give 12 to 13 per cent returns to investors in India, we can make it with 6-8 per cent in Singapore as REITs are mostly subscribed by insurance funds, pension funds and others who are content with minimum returns,’’ said an analyst.