REITs Distributions Soar to Rs 2,754 Crore in H1FY25: A Closer Look
Hyderabad, Dec 4 (UNI) Unit holders of four Real Estate Investment Trusts (REITs) have received a total distribution of Rs 2,754 crore in the first half of FY25, marking a 14% increase from the previous year.
ReitsDistributionsH1fy25Real EstateInvestorsReal Estate NewsDec 04, 2024
The Indian REITs sector has been performing significantly well, managing gross assets worth over Rs 1.50 lakh crore, with a market capitalization exceeding Rs 95,000 crore as of November 1, 2024. Since their inception, the four REITs have collectively distributed more than Rs 19,000 crore to unit holders. The publicly listed REITs in India include Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, and Nexus Select Trust. These REITs manage over 125 million square feet (MSF) of premium office and retail space across the country.
REITs are known for their tax-efficient structure, distributing at least 90% of their net distributable cash flows on a semi-annual basis. Investors can purchase units for as low as Rs 100 to Rs 400 per unit, making them an accessible investment option for a wide range of investors. This structure ensures that the returns are regularly distributed, providing a steady income stream to investors.
The awareness program, organized by IRA and BIA, aimed to enhance investor understanding of REITs and Infrastructure Investment Trusts (InvlTs). Speaking at the event, BIA highlighted the significant growth potential of InvlTs in India, driven by the country’s expanding infrastructure needs and government initiatives to build infrastructure for future growth. The government’s ambitious national Infrastructure Pipeline and national Monetization Pipeline projects are expected to boost the AUM of InvlTs to Rs 21 lakh crore by 2030.
InvlTs manage gross assets worth over Rs 5 lakh crore, with a market capitalization exceeding Rs 1.60 lakh crore as of September 2024. Over the past five years, InvlTs have achieved a total pre-tax return of 17.1%, underscoring their effectiveness as a strategic tool for asset allocation. At least 80% of an InvlT’s portfolio consists of operational revenue-generating assets, minimizing the risk associated with under-construction projects.
InvlTs provide investors with exposure to a diverse range of assets, including roads, transmission, generation, and telecom and warehousing. They facilitate democratic ownership of large infrastructure assets, offering a safer avenue for investors to participate in the country’s infrastructure growth. Additionally, InvlTs help free up capital for developers, allowing them to reinvest in new projects. Currently, out of the 26 SEBI-registered InvlTs, four are publicly listed on stock exchanges, while 15 are privately listed.
Both REITs and InvlTs are regulated by SEBI and play a crucial role in driving growth in India’s real estate and infrastructure sectors. The awareness program was designed to educate investors, promote the adoption of REITs and InvlTs, strengthen the operating and regulatory environment, deepen capital markets, and increase overall investor awareness.
Frequently Asked Questions
What are REITs and how do they work?
REITs, or Real Estate Investment Trusts, are investment vehicles that pool money from multiple investors to purchase and manage real estate properties. They distribute at least 90% of their net income to investors, providing a steady income stream.
How much have the four Indian REITs distributed in H1FY25?
The four Indian REITs have distributed a total of Rs 2,754 crore in the first half of the current financial year, marking a 14% increase from the previous year.
What are the four publicly listed REITs in India?
The four publicly listed REITs in India are Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, and Nexus Select Trust.
What is the market capitalization of Indian REITs as of November 2024?
The market capitalization of Indian REITs is over Rs 95,000 crore as of November 1, 2024.
What is the potential AUM of InvlTs by 2030?
The potential AUM (Assets Under Management) of InvlTs in India is expected to reach Rs 21 lakh crore by 2030, driven by government initiatives and expanding infrastructure needs.
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