First REIT launched in India
Anshuman Magazine, Chairman & CEO, India, South East Asia, Middle East & Africa, CBRE shares his thoughts on the landmark happening.
The launch of Blackstone-Embassy Group’s REIT today marks an important milestone in the Indian real estate sector. Over the past few years, the government has taken several initiatives to boost investments in the real estate sector and the launch of India’s first REIT is another step in this direction. REITs as a product would significantly enhance the transparency and governance in the commercial real estate market and attract more institutional fund flows into the sector. The listing and its subsequent performance would be closely monitored by various stakeholders – developers, institutional funds, corporate houses etc. A successful REIT listing might result in multiple offerings by various other sponsors in the near future, including office, retail, warehousing, hospitality etc.
Globally, REITs have a proven and successful track record in several Asian countries such as Japan, Singapore, Malaysia, Thailand, Taiwan, South Korea, and Hong Kong. In 2017 alone, total acquisitions undertaken by REITs in APAC crossed USD 20 billion, with an approximate share of 15 percent in the overall commercial real estate acquisitions undertaken in the region. In the first half of 2018, REIT acquisitions touched USD 10 billion, accounting for a share of 17 percent in the overall investment volume in the region during the period.
For many real estate markets in the world and Asia, REITs have proven to be a game-changer for the sector and have the potential to boost investor sentiment. India offers major advantages such as a wide variety of quality assets, sustained government support in easing regulations, a wide investor base, and opportunities for capital appreciation, among others. Hence, we are hopeful that India’s first REIT will be a big success and will help elevate global sentiments on the Indian real estate market.