CRE Matrix launches national office rentals index, says large opportunity in REIT space

Investors have long complained about the lack of an unified index to track office rentals, especially with the emergence of REITs

Real estate data analytics firm CRE Matrix has launched what it calls India's first commercial property real estate price index for Grade-A office spaces, tracking office rentals across six major leasing markets, as well as multiple micro-markets within those cities. The firm tied up with the Indian Institute of Management-Bengaluru (IIM-B)'s real estate research initiative for the indices.

According to CRE Matrix, the data will be especially useful for investors in real estate investment trusts (REITs), as well as the nascent small and medium REITs (SM REITs), as it will help both investors and trust managers to make more informed decisions, based on long-term rental movements in cities and micro-markets. The firm launched 36 indices on November 29, and has plans to add on to those, such as for housing, and "green" offices.

While CRE Matrix provided the transaction data for the indices, researchers at IIM-B conducted the modelling and backtesting of the indices in collaboration with multiple stakeholders. The data for the indices has been drawn largely from lease transaction registration documents with various state governments.

In an interaction with Moneycontrol, Abhishek Kiran Gupta, the chief executive officer and co-founder of CRE Matrix, said that such an index has been needed for a while now for the benefit of both real estate investors, and occupiers and developers. The data has been launched for Mumbai, Delhi NCR, Bengaluru, Hyderabad, Chennai, and Pune, and its various micro-markets.

"The feedback that we receive from occupiers and investors is that the available market data in office real estate, such as rentals, differ across various sources. This index is our effort to bring all the data together, including from the various international property consultants that are our clients. This will help create the benchmark for the segment, as indices like Nifty 50 and Nifty 100 did for the mutual fund industry," Gupta said.

With 2012 as the base, data from the indices found that Pune's Grade-A office space market has had the most rental growth over the 12-year period, increasing by more than 2.2 times. Gupta said that post-pandemic growth in office space leasing has also been a key trend observed in the data, negating fears of a slowdown due to work-from-home trends.