The India REIT opportunity
India REITs market poised to evolve in 2021, led by Bengaluru, at 88 million sq. ft.
2021 began with the successful launch of India’s third REIT sponsored by an affiliate of Brookfield Asset Management. India’s real estate landscape has witnessed some landmark transactions in the past few months – starting from the successful launch of Mindspace REIT, the first secondary equity raising by Embassy REIT and the sale of two of the largest portfolio deals on record.
India’s REIT market will enter a period of prolonged growth, with more REITs forecast to be listed in 2021 and beyond. According to our report, 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.
Bengaluru is 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, allowing for the aggregation of assets into managed structures.
REIT worthy assets/ Stocks across other major Indian cities
City |
In mn sq ft) |
In % |
Value USD bn |
Value INR cr |
Delhi NCR |
48.3 |
17% |
6.48 |
47,304 |
Mumbai |
36.9 |
13% |
6.84 |
49,932 |
Chennai |
36.9 |
13% |
4.68 |
34,164 |
Hyderabad |
36.9 |
13% |
3.24 |
23,652 |
Pune |
31.2 |
11% |
3.24 |
23,652 |
Source: JLL Research
The listed markets in India performed well, providing confidence in the future of the India REIT sector. The successful initial public offering of two new REITs and the first secondary equity raising by an existing REIT in the last 12 months ensured that the total listed REIT market capitalisation grew by USD 1.62 billion; expanding the investible universe for retail and institutional investors.
In our view, these transactions were made possible even amidst a pandemic, as REITs have transformed India’s real estate corporate finance landscape and market liquidity, in a number of ways.