India's REIT Market Emerges as Fastest-Growing in Asia Pacific
India's real estate investment trust (REIT) market grew 31% YoY in 2023, outpacing the rest of Asia Pacific.
ReitIndiaReal EstateInvestmentAsia PacificReal Estate NewsAug 12, 2024
According to a report by Cushman & Wakefield, the Indian REIT market's growth is attributed to the introduction of Blackstone's Nexus Select Trust, the country's first publicly listed retail REIT. The report also highlights the positive outlook for office markets, with employees returning to work and large deals back in the market, along with high occupancy rates in existing portfolios.
The Indian REIT market is still in its nascent stages, with only four REITs currently operating. However, the initial public offerings (IPOs) of these REITs have garnered significant investor interest, indicating the product's attractiveness to investors. There are 225 active REITs across Asia, with traditional market powerhouses like Japan, Singapore, and Hong Kong dominating the market.
However, the emerging Chinese mainland and Indian REIT markets are adding new layers of opportunity and growth to the region. India's strong performance highlights its emergence as a significant player, offering investors attractive opportunities for diversification and growth.
Nexus Select Trust, which has a portfolio of 17 urban shopping centers across 14 tier-1 and tier-2 cities, has witnessed a 30% rise in stock price in one year since its IPO. The trust plans to double its portfolio by 20 million square feet in the next five years through strategic acquisitions.
Top office REITs, such as Embassy and Mindspace, have also given 9-10% CAGR returns in the last two years, reassuring investors and trustees alike. REITs are a global asset class that were first introduced in the United States in 1960 to allow retail investors to invest in commercial real estate in a liquid vehicle that was listed on stock exchanges.
Globally, there are 893 listed REITs with a collective equity market capitalization of approximately $1.9 trillion (as of December 2022). While India brought in regulatory guidelines for REITs in 2014, the product became a reality with the launch and listing of Embassy REIT in 2019.
Mindspace Business Parks REIT was listed on exchanges in 2020, followed by Brookfield India Real Estate Trust in 2021. Nexus Select Trust was listed in May 2023.
The future looks bright for the REIT market in India, with more developers listing their portfolios and institutional demand for high-quality assets continuing in office and retail segments.
Frequently Asked Questions
What is the growth rate of India's REIT market in 2023?
31% year-on-year
What is the current number of REITs operating in India?
4
What is the plan of Nexus Select Trust for the next five years?
To double its portfolio by 20 million square feet through strategic acquisitions
What is the global equity market capitalization of listed REITs?
Approximately $1.9 trillion (as of December 2022)
When was the first REIT listed in India?
2019 (Embassy REIT)
Related News Articles
Misuse of Power Allegations Lead to Transfer of Pune IAS Probationary Officer
Dr Pooja Khedkar, a probationary IAS officer in Pune, has been transferred to Washim following allegations of misuse of power. The transfer decision comes after Dr Khedkar reportedly sought unauthorized privileges and made demands that went against protoc
Ghaziabad's Luxury Real Estate Market Gets a Boost with Rs 3,000 Crore Worth of Flats Sold in 48 Hours
The Gaur NYC Residences, featuring New York-style luxury apartments, has set a new benchmark in the real estate sector, with over Rs 3,000 crore in bookings within just 48 hours.
India's Office Space Leasing Reaches New Heights, Driven by Global Occupiers
India's position as the office-to-the-world remains intact as global occupiers continue to drive their real estate expansion here. In Q3, they remained active with a 56.8 per cent share of gross leasing volumes.
Luxury Real Estate in Mumbai Sees Boost as Kishore Mishrilal Bang Acquires Two High-End Apartments
Kishore Mishrilal Bang, promoter of Nirmal Bang Securities, has acquired two luxury apartments in Mahalaxmi, Mumbai, for INR 45.69 crore, highlighting the growing demand for high-end real estate in the city.
The Challenges and Rewards of Running a Real Estate Business in India
In a candid conversation with Zerodha co-founder Nikhil Kamath, leading figures from Bengaluru’s real estate sector shared their insights on the challenges and joys of running a business in one of the most dynamic markets in India.
DLF to Invest Rs 20,000 Cr in Ongoing Housing Projects; Eyes Rs 43,000 Cr Surplus Cash
DLF, one of India's leading real estate developers, plans to invest Rs 20,000 crore to complete its ongoing housing projects. The company aims to generate Rs 43,000 crore in surplus cash, levering its extensive development potential of 220 million square