India’s First REIT Debuts on NSE
The Embassy Office Parks REIT, India’s first share sale in a property collection under one operator, became the country’s second-most valuable real estate company on its stock-market debut, highlighting the potential of an investment product that already finds favour with the uberrich in New York, Singapore or London. After gaining as much as 8 per cent to Rs 324.50, compared with the offer price of 300, the REIT units ended at Rs 314.10, up 4.7 per cent. On closing price, the Embassy REIT was valued at Rs 24,238 crore, bettered in the property space only by DLF, which has a market capitalisation of Rs 38,474 crore.
And analysts believe there is scope for immediate further appreciation. “It is a landmark day for Indian commercial real estate as the much-awaited REIT debuts. The positive listing at 4% premium demonstrates the demand for India’s maiden REIT. REITs will allow greater participation from retail investors in the asset class. The commercial office space segment has been growing from strength to strength over the past few years and has transacted a record 47 million square feet in 2018 along with sustained growth in rentals across prime business districts. We expect this momentum to sustain in the near future which would encourage more participants to enter the REITs market, which in turn will improve the fund flow into the sector.” said Shishir Baijal, Chairman & Managing Director at Knight Frank India.
“The oversubscription of REITS has also enhanced sentiment which is reflecting on stock indices too. With significant investment from retail investors; it indicates that the sentiment is positive throughout. This will help infuse liquidity in the sector which is the need of the hour. Also, until the real estate industry remains flooded with unsold inventory, prices will remain stable.” – stated Mr. Ashok Mohanani, Chairman, EKTA World, Vice President, NAREDCO Maharashtra.