Moneycontrol Be a Pro
Get App
you are here: HomeNewsreal estate
Last Updated : | Source: Moneycontrol.com

Commercial REITs can raise over $25 billion in next three years: Report

Currently, the top seven cities have close to 550 mn sq ft Grade A office supply - of which 310-320 mn sq ft is REITable as of now, the report said.

Moneycontrol News @moneycontrolcom
9 | Golf Course Road, Gurugram - Rs 12,500 per sq ft (Reuters)
9 | Golf Course Road, Gurugram - Rs 12,500 per sq ft (Reuters)

Commercial REITs may raise over $25 billion for Indian real estate over the next three years, as per a report by ANAROCK Capital.

This involves the listing of more than 150 mn sq ft of rent-yielding Grade A office properties across the top seven cities - covering 25-30 percent of the overall Grade A office space in these cities, it said.

Currently, the top seven cities have close to 550 mn sq ft Grade A office supply - of which 310-320 mn sq ft is REITable as of now, the report said.

Close

The enthusiastic response to Embassy Office Parks' REIT launch is priming investors for similar REIT opportunities, which in turn will open up more funding avenues for the sector. Several large developers are keen to list their commercial assets.

Bengaluru-based Prestige Group plans to list its first commercial REIT very soon and has already started segregating its residential, office, retail and hospitality businesses. It may also launch a retail REIT as and when the opportunity arises. Other players in the REIT fray are RMZ Corp, K Raheja Corp, Godrej Properties and Panchshil Realty, the report said.

REITs will help commercial developers improve their liquidity by unlocking the value of their assets to raise capital. For big and small investors, it is a highly de-risked investment route offering annual returns of as much as 12-14 percent over the long-term.

While the commercial office sector will dominate Indian REIT listings for the next couple of years, retail and logistics REITs are sure to follow, it said.

However, Indian residential REITs remain at best a distant possibility. The draft Model Tenancy Act, 2019 will make rental housing a more attractive investment play - but for Indian residential REITs to succeed as they have in countries like Singapore and the US, rental yields on Indian housing need to significantly surpass the current 1-3 percent.

The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .
First Published on Oct 9, 2019 05:05 pm
Loading...
NULL int(1)
Sections
Follow us on
Available On
PCI DSS Compliant