New Delhi: India has $35 billion worth of office space eligible to be listed under the Real Estate Investment Trust (REIT), according to property consultant JLL India.
REIT is an investment tool that owns and operates rent-yielding real estate assets. It allows individual investors to make investment in this platform and earn income.
The successful listing of India's first REIT floated by Embassy Office Parks heralds the institutionalisation of real estate assets in India.
"Growing knowledge of REITs will ensure acceptability and gradual increase of interest from retail investors. We expect to see other asset classes like retail, warehousing and hospitality also offering REITable assets in the times to come," JLL India Chief Executive Officer and Country Head Ramesh Nair said.
According to JLL's latest report titled India REITs-Heralding a New Era in Real Estate Investments, released on Wednesday, Indian commercial real estate market is estimated to provide 294 million sq ft of REITable space from the existing office stock. "These REITable assets would be valued at USD 35 billion".
Investors have allocated nearly $17 billion in the form of direct investments as well as through entity-level investments from 2006 to 2019 in the office space.
The report found out that with 33 per cent share of REITable space, Bengaluru will provide the highest REITable assets totaling 97.8 million sq ft, worth $10.7 billion.
Mumbai follows with 17 per cent share of total REITable space at 49.7 million sq ft worth $8.6 billion.
While the strong institutional flow of funds into real estate will continue to provide initial momentum towards REITs' growth in the country, active participation of insurance and pension funds in future will help in long term growth of the market, Das said.
Meanwhile, a survey by property consultant Anarock has shown that ready-to-move-in flats are the preferred choice for home buyers in India, though the demand for newly launched units has also improved with the reduction of GST rates from this month.
The implementation of new real estate law RERA and lower GST rates immensely helped revive consumer faith in new launch properties, Anarock said in its latest Consumer Sentiment Survey H1 2019.
The consultant found out that 70 per cent of respondents preferred properties priced within Rs 80 lakh.
