PE funds gearing up for REITs
Private equity (PE) funds in India are looking to portfolios of income-producing real estate assets as the country prepares to allow listing of real estate investment trusts (REITs). Redfort Capital, Golden Estates, Kotak Realty Fund and Blackstone Group are few of the PE firms planning to invest in such assets. REIT is a type of security that is sold like a stock on an exchange. It invests and owns real estate assets, thereby, produce a stable rental income for shareholders. Through REIT, the builders can monetise their assets, raise money for their projects and provide an easy way to exit for investors.
Anshuman Magazine, chairman and managing director at CBRE South Asia, a property advisory firm says this is a positive development for the realty sector and will provide alternative funding channels to the realty sector. Sebi has circulated the draft guidelines for permitting REIT and now final clearance is awaited.
Sourav Goswami, principal (capital markets) at Red Fort Capital says that high quality leases still provide good returns in India. He adds that this structure should provide significant value and liquidity in the markets for investors.
Blackstone, a leading PE firm, is buying is buying commercial properties across cities like Bangalore, Delhi and Chennai along with Embassy Group.
S Sriniwasan, CEO at Kotak Realty Fund says that total market for income-producing assets in India is around 45 million sq ft and this is a big opportunity. He puts the total market size to be around Rs 270 billion.
Golden State Capital is planning to set up an REIT in Singapore as India is still to give its final clearance. Gaurav Pandey, CEO at Golden State Capital is positive about the development in India.
Qatar Investment Authority is aiming at a portfolio of 20 million sq ft of office space before it goes for listing. The company has backed family-owned RMZ.
Source: The Economic Times
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