Kolkata: Real Estate Investment Trust (REIT) firms in India are engaging in discussions to create an association that would represent the industry and drive the promotion of this emerging investment product, which is still in its nascent stage. The envisioned association could follow the model of the Association of Mutual Funds in India (AMFI).
Currently, there are only four listed REIT entities in India. These include Embassy Office Parks REIT, Mindspace Business Parks REIT, Brookfield India REIT, which are office space-backed REITs, and Nexus Select Trust, the country’s first mall and retail-asset-backed REIT.
According to a senior official from a leading REIT firm, who requested anonymity, talks are underway to establish an association that would represent the REIT sector and facilitate collaborative efforts to raise awareness about this innovative product, which holds significant opportunities.
The formation of the association is currently being deliberated among all stakeholders, including the Securities and Exchange Board of India (Sebi), with details expected to be finalized within the current fiscal year. Another REIT official mentioned that the initiative is still in the preliminary stages.
The establishment of the association could play a pivotal role in setting industry standards and regulations for the REIT sector in India. This would foster a more robust and transparent market for REITs, ultimately benefiting investors, the official added.
Furthermore, the association would help promote the advantages of investing in REITs and increase awareness about this innovative investment vehicle.
REITs are investment vehicles that enable investors to acquire shares in a diversified portfolio of real estate assets. They offer a more liquid and diversified approach to real estate investment compared to individually purchasing properties.
India’s REIT sector holds significant untapped potential, with approximately 57% of existing Grade A office space, equivalent to 380 million square feet, eligible for listing as REITs. Presently, the total space managed under REITs is estimated to be around 100 million square feet, as per an official.
While the formation of the association is still in its early stages, it represents a positive development for the Indian REIT sector. The association’s establishment would help promote the product, making it more accessible to investors, as highlighted by officials.
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