Institutional investors look to India after successful debut of first Reit

Embassy Office Parks REIT, sponsored by US-based equity investor Blackstone Group and local partner Embassy Group, has risen about more than 17 per cent since its debut on April 1

Real estate assets in India that qualify for inclusion in a Reit are estimated at 294 million sq ft, or equivalent to potential value of US$35 billion, according to JLL

3-MIN READ3-MIN

Embassy Office Parks REIT raised 47.5 billion rupees (US$690 million) through its share sale on the Bombay Stock Exchange, pictured. Photo: Twitter

Published: 10:00am, 4 Jun 2019Updated: 7:12pm, 4 Jun 2019

Investment funds are eyeing India as a destination for building up stakes in real estate investment trusts (Reits), attracted by the prospects for its vast commercial and office holdings.

In April, India successfully listed its first domestic Reit, in what amounted to the largest offering of its kind in the region.

Embassy Office Parks REIT raised 47.5 billion rupees (US$690 million) through its share sale, sponsored by India’s Embassy Group and US-based equity investor Blackstone Group, according to the listing prospectus posted on the website of the Securities and Exchange Board of India (SEBI).

The Reit has assets estimated to be worth at least 314.8 billion rupees (US$4.5 billion), including office, hotel, and retail properties. The Embassy REIT portfolio is located in four gateway cities in India namely Bangalore, Mumbai Metropolitan Region, Delhi NCR, and Pune, with 16 assets such as the tech parks Embassy Manyata, Embassy Oxygen, Embassy Galaxy, Embassy Techzone, and FIFC.

Embassy Office Parks REIT closed at 352.05 rupees in Mumbai trading on Friday, reflecting a gain of 17.35 per cent from its offer price of 300 rupees per share since its trading debut on April 1.

Residential and commercial buildings in the Bhendi Bazaar area of Mumbai, India. Photo: Bloomberg

Real estate assets in India that qualify for inclusion in a Reit are estimated at 294 million square feet, equivalent to a potential value of US$35 billion, according to 2018 calculations by property consultancy JLL.