Connect with us










Main

REITs in India – Opportunity Awaits

REITB

Considering the capital-intensive nature of the commercial real estate sector as an investment avenue and also the limited investment opportunities with regards to high-grade office assets, REITs (Real estate investments funds) will be a big boon for the Indian real estate industry. In simple terms, a REIT is an investment tool that owns and operates real estate assets and even allows individual investors to invest in and earn income through partial/equity level ownership of commercial real estate without actually having to buy those assets.

REITs are modelled after mutual funds, and provide their investors with all types of income streams – as well as the benefits of long-term capital appreciation. A REIT also trades on major stock exchanges and provides investors with a highly liquid stake in real assets typically offering high yields.

Over the last decade, globally, REITs have developed into a mature market force, providing easy access to high-quality assets along with stable return on investments. To illustrate – as of 2016, there were over 500 REITs operating across various countries, with total market capitalization of more than USD 900 billion.

Taking a closer look at REITs globally:

  • USA: The US Congress created the Real Estate Investment Trust (US-REIT) in 1960 to make large-scale, income-producing real estate investments accessible to smaller investors. Since then, US-REIT has dominated the market, and has a market capitalization which grew from USD 1.4943 billion in 1971 to USD 1 trillion by 2016.
  • Singapore: Since the launch of the first Singapore REIT in 2002, the REIT sector has become one of the biggest success stories of the Singapore Stock Exchange (SGX). Singapore REITs have since grown into a USD 53 billion market. Currently, the total ‘REITable’ stock available in Singapore’s CBD is 2.687million sq m.
  • Australia: The first REIT in Australia was the General Property Trust – a listed property trust started in 1971. A-REITs are the largest REIT market in Asia with a total market capitalization of almost €72 billion, accounting for 9.36% of the global REIT market capitalization. The Sydney CBD market has 3.060 million sq. m. of REITable stock.

Given the currently sluggish demand for residential real estate in India, the office sector provides some relief for real estate developers, given the declining vacancy levels and improving rents. With declining vacancies, superior quality buildings in CBDs, SBDs and PBDs are likely to see maximum REITable assets.

Close to 283 million sq ft of office space in India is REITable. Currently, there are 901 REIT-worthy properties in India:

Advertisement










There is no doubt that REITs will provide access to highly lucrative assets, such as large-scale commercial properties and high-quality retail assets, that may be otherwise out of reach for individual investors. Once the first REIT listings go live in India, we will definitely see significantly increased institutional and retail investor participation in this market.

Latest News

News12 hours ago

Central Park’s Bignonia Towers in Sohna Achieves Rs 500cr Sales Bookings 

New Delhi, 14th June 2024: Bignonia Towers by Central Park in in Sohna has recorded sales bookings of Rs 500...

News12 hours ago

Author Ashwinder R. Singh Launches His Third Book, “Master Commercial Real Estate”

June 14, 2024: Ashwinder R. Singh, acclaimed for his insightful contributions to real estate, launched his third book, “Master Commercial...

News12 hours ago

Grade A Office Spaces Demand Growing at a Brisk pace, 164.3 Mn Sq Ft Added Since 2021

June 14, 2024: India’s office market is undergoing a profound transformation, reflecting the country’s robust economic growth, demographic advantages, and...

News13 hours ago

Real Estate Sector Needs to Gear Up for New Housing Challenges Until 2029, With Rain Harvesting as a Core Element for Housing Projects: HUA Additional Secretary

New Delhi, June 14, 2024: Additional Secretary of the Ministry of Housing and Urban Affairs, D Thara, on Friday asked...

News2 days ago

Tier-2 Cities Closing the Gap with Top-8 as Property Prices Surge by 10-15% in Prime Areas: Housing.com Report

New Delhi, June 13, 2024: Housing.com has released its inaugural “The Bharat in India” report on Thursday. The report unveils...

News2 days ago

Housing Prices Soar 13% CAGR as Inflation Moderates to 5.4%: ANAROCK Report 

Mumbai, June 13, 2024: Inflation, the gradual increase in the general prices of goods and services, erodes the purchasing power of money...

Trending