How REIT investments are likely to cross USD 10 bn in India in two years

Last Updated: Tue, Aug 20, 2019 16:00 hrs
Real estate

New Delhi: Investments raised through Real Estate Investment Trusts (REITs) are likely to cross $10 billion as more REITs offerings are likely to be announced by financial year 2020-2021, a joint report by KPMG and NAREDCO on Monday said.

It said that after the success of Embassy REIT launched earlier in the year, other major real estate players and private funds are also evaluating REITs listings, with underlying asset classes comprising varied real estate segments.

"Additional REITs offerings are anticipated to debut by FY2021 with value investment raised expected to cross $10 billion. Contrary to funding raised by mortgaging real estate assets to limited set of investors (private equity, NBFC, banks etc)," said the report titled "Disruptions in real estate in India."

Released at the 15th national convention of the National Real Estate Development Council (NAREDCO), the report observed that REITs provide real estate developers a mass funding platform for raising public investment on a relatively larger scale. Utilising financed capital for working capital improvements and asset portfolio expansion, real estate cycles can be revived leading to resurgence of real estate sector activity, it said.

The next phase of REITs evolution shall be ushered through diversification and inclusion of new asset classes underlying the REIT portfolio.

"High growth segment real estate asset classes such as hospitality, logistics, warehousing, healthcare and housing seem promisig to be brought under the REITs framework," the report said.

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