REITs wait for the SEBI guidelines to take off
RMZ Offices plans to raise $1.5 billion, or Rs 9,000 crore, through a real estate investment trust (REIT) either in Singapore or Mumbai. RMZ (corporate) vice-chairman Manoj Menda mentioned that the Bangalore based commercial office space landlord RMZ Offices has started work with the bankers to take its rent-yielding office buildings to the market within 15 months.
These office buildings are valued at $3 billion. Qatar Investment Authority is a large investor in RMZ offices. RMZ and Qatar Investment Authority, the sovereign wealth manager of Qatar, will sell their 50 % stake in RMZ Offices. REITs are designed to provide an investment structure in real estate similar to the kind that mutual funds provide for investment in traded stocks, and are inflation-indexed.
The finance minister Arun Jaitley’s first budget which had announced the launching of REITs received a positive response in the market due to the positive tax moves. Once SEBI (Securities and Exchange Board of India) announces the final guidelines big-ticket listing of real estate and investment trusts are expected to kick off.
It is expected that by this time next year, RMZ will have a portfolio of 20 million leased office space generating $225 million net income. Menda also mentioned that there will be another 19 million to be developed over the next five years. RMZ is seeking 12 times valuation on the net income, while Singapore-based Ascendas, which owns IT parks in India, currently trades at 14 times on SGX (Singapore Exchange).
Source- The Times of India
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