At the time when the Real Estate sector is facing a huge liquidity crisis, the debut of REIT in India will be a total game changer and an oncoming of new capital. With 90 per cent of their income to be distributed as dividends plus the potential for moderate and long-term capital appreciation, REITs can be considered as total return investments and will also encourage the industry to emulate developed markets like Australia, Canada, Singapore and the UK.
With approximately 56 million sq. ft absorption per month in 2018, the country is witnessing a phenomenal absorption story and currently, the stock in the country is 67 million sq. ft of office space, depicting vacancy levels ranging from 6 per cent – 28 per cent in the top seven cities. A further drop in vacancy levels is expected from the on-going absorption which will in turn result in rentals to rise further.
Mr. Pradeep Aggarwal, Founder and Chairman, Signature Global says, “With the introduction of REIT in our country, the developers are getting alternate strategies and also might have large income yielding the commercial portfolios that is yet to be followed. The Real Estate sector is yet to experience many segments in which the Embassy REIT is the first.”