Delhi NCR beats Mumbai for REITable stock of commercial properties

New Delhi: Delhi NCR has beaten Mumbai to emerge as home to the largest REITable stock of commercial properties in the country. Delhi NCR has 48.3 million square feet of REITable stock as compared to 36.9 million square feet in Mumbai. 

In percentage terms, the REITable stock of commercial properties in Delhi NCR is about 17 percent of the stock of such real estate assets in the top seven cities of the country, as compared to Mumbai having 13 percent only. However, in value terms, Mumbai leaves behind Delhi NCR. The value  if the REITable stock in Mumbai is Rs 49,932 crore as compared to 47,304 crore in Delhi NCR, according to a report by JLL.

Bengaluru is home to the largest source for such assets that is available for securitisation, accounting for around 31 percent of the possession of top seven cities. The IT capital has about  88 million square feet of REIT worthy properties. The city is already home to the first REIT of the country. 

The REITs already listed in the country have performed quite well, giving hope for the future of REITs in India.

The first REIT in the country was listed in the year 2019, paving the way for proper framework for better transparency and liquidity provisions for the same.  The third sponsored REIT in the country made its debut in early 2021. 

“India’s REIT evolution has been both rapid and revolutionary for the real estate sector. The fact that the closing of transactions was made possible even amidst a pandemic has demonstrated the maturity of the market and transformed India’s real estate corporate finance landscape and market liquidity. Furthermore, we are encouraged by the larger domestic institutional investor participation in the more recent listings and the emergence of a public private arbitrage play welcomed by all investors in the market,” says Priyank Shah, Director, Capital Markets, Asia Pacific, JLL. 

There are many chances for institutional investors to invest in REITs. They can invest in two ways-by assembling several complementary asset portfolios for monetisation into REITs or co-investing with the current platforms before the IPO.