India REITs market poised to evolve in 2021: JLL
India REITs market poised to evolve in 2021, led by Bengaluru, at 88 million sq. ft: JLL
MUMBAI, 23 March 2021 - India’s Real Estate Investment Trust (REIT) market will enter a period of prolonged growth, with more REITs forecast to be listed in 2021 and beyond. According to JLL, the number of buyers and sellers will broaden significantly with the listing of more REITS in India, further increasing market liquidity and yield compression, and the incentive to securitise property assets.
“The continued success of listed REITs in India can be attributed to sponsor quality, track record and ability to stay transparent and deliver predicable returns. JLL believes that India’s current office markets across seven major cities have potential space of 284 million sq. ft that could be securitised with an estimated value of USD 36 billion (INR 262,800 crores). This estimate was based on buildings that meet two important criteria - single ownership and large floor space with high occupancy rate.The office space led the pack among asset classes in India, with direct office transactions reaching USD 3.1 billion in 2020, underscoring its importance to future REIT listings in India.” Dr Samantak Das, Chief Economist and Head Research & REIS, JLL India.
Bengaluru is identified as India’s largest source for potential assets available for securitisation, accounting for 31% or 88 million sq ft of REIT worthy asset, valued at USD 11.16 billion (INR 81,468 crores) The city, with large IT spaces housing global occupiers, will be the most favoured market for newly listed REITs, given that most assets are singly owned by developers or large funds, allowing for the aggregation of assets into managed structures.
REIT worthy assets/ Stocks across other major Indian cities
|City||(mn sq ft)||In %||Value USD bn||Value INR cr|