India expects to get its first REIT of retail assets soon: Report
Premium- JLL report claims that REITs in retail will be the next big move in the sector as institutional investors are building portfolios of superior-grade retail assets.
With institutional investors and developers look to monetise their rent-yielding space in shopping malls, India is expected to get its first Real Estate Investment Trust (REIT) of retail assets soon, says property consultant JLL India.
REIT was introduced in India a few years ago to attract investment in the real estate sector by monetising rent-yielding assets that helps unlock the massive value of real estate assets and enable retail participation.
Currently, there are three listed REITs - Embassy Office Parks REIT, Mindspace Business Parks REIT and Brookfield India Real Estate Trust - on Indian stock exchanges but all these are of leased office assets.
According to JLL report, the institutional investment in the retail sector has been picking up since 2021. Over $862 million investments have come from 2021. Eith by buying a stake in existing assets or through greenfield development platforms, many global investors are investing in the retail sector.
"The retail market seems to benefit from favourable demographics, rapid urbanisation, and rising consumption," the consultant said.
"Investors are looking for quality Grade A assets by established developers having less vacancy. Investors prefer leased-based assets over strata-sold assets to ensure fair market rentals and timely returns," it added.
With significant activities have been recorded in Tier 2 and Tier 3 cities, the investment in retail assets is not just limited to metros.
"Additionally, investments by these big institutional players help developers to exit the project partially or fully, reduce their debt, and focus on other developments. A lot of foreign funds are willing to acquire quality retail assets yielding good rental income," the report said.
JLL report claims that REITs in retail will be the next big move in the sector as institutional investors are building portfolios of superior-grade retail assets.
With PTI inputs.
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