Reits ship 2.58-8.11% annualised returns since itemizing, says report

NEW DELHI: Of the three Reits (Real Estate Investment Trust) registered with the Securities Exchange Board of India (Sebi), Mindspace Business Parks has delivered the best absolute returns of 8.11% year-to-date until 31 October, in line with a report by India Windmill Capital, a wholly-owned subsidiary of smallcase.

The different two, Brookfield India Real Estate Trust and Embassy Office Parks, have delivered absolute returns of seven.30% and 1.40%, respectively, throughout the identical interval.

The report additionally offered information on the efficiency of the three Reits since their itemizing. Embassy Office Parks was the primary to be listed in April 2019 and has delivered 2.58% since then. Mindspace Business Parks and Brookfield India Real Estate Trust had been listed in August 2020 and February 2021, respectively, and have delivered 8.11% and seven.30%. Returns higher than one 12 months are annualised, as per Windmill Capital.

Between 30 September 2021 and 30 September 2022, India recorded 6.85% year-on-year (YoY) progress in complete leasable space of listed Reits from 87.6 mn sq ft to 93.6 mn sq ft, the report confirmed.

“According to company filings of listed Reits , Bengaluru continues to dominate the Reits market with 27.8 mn sq ft of complete leased space underneath Reits as of 30 September 2022. Noida witnessed an exponential progress in complete leasable space underneath Reits from 7.4 mn sq ft as of thirtieth September 2021 to 11.9 mn sq ft as of thirtieth September 2022, registering 60.81% YoY progress,” Windmill Capital said in its statement.

As per expansion plans of the listed Reits, current leasable area is expected to grow by over 10% in the coming quarters.

“India’s Reits market is poised for accelerated growth as both investors and sponsors are drawing confidence from evolving regulatory framework, transparency, institutionalised ownership and ability to deliver robust returns. Regulations have also encouraged retail investors with the reduction in minimum subscription (from ₹50,000 to ₹15,000). This increases the liquidity for the entire Reits market and allows greater participation from young retail investors,” mentioned Vasanth Kamath, founder and CEO, smallcase.

Citing findings from an upcoming report titled ‘Rise of the Indian Retail Investor’ by Zinnov Management Consulting and smallcase, Windmill mentioned Reits are rising in reputation as retail traders allocate as much as 2% of their funding portfolio in Reits as in comparison with 5 years again.

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