Hyderabad has 12.7 mn sq ft of leasable area under REITs

Hyderabad: India recorded 6.85 per cent YoY growth in total leasable area of listed Real Estate Investment Trust (REITs) to 93.6 million sq ft as of 30th September 2022 from 87.6 million sq ft by the same period last year, says a study on REITs by Windmill Capital, a wholly-owned subsidiary of smallcase Technologies Pvt Ltd.

According to the corporate filings of listed REITs, Hyderabad recorded 0.79 per cent YoY growth in total leasable area under REITs to 12.7 million sq ft as of 30th September 2022 from 12.6 million sq ft a year ago. The city is amongst the four Indian cities that will witness new REIT developments soon.

The city could witness additional 1.8 million sq ft of new REIT leasable area. Additionally, according to listed REITs' expansion plans, current leasable area is expected to grow by more than 10 per cent in the coming quarters. REITs have emerged as a strong investment alternative, due to market volatility and inflationary pressures which have led investors to view REITs as an asset diversification strategy.

This is also validated in an upcoming report titled 'Rise of the Indian Retail Investor' by Zinnov Management Consulting and smallcase which indicates that retail investors allocate up to 2 per cent of their investment portfolio in REITS as compared to five years back.

Sharing a perspective on REITs, Vasanth Kamath, Founder & CEO, smallcase said, "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."

He further said, "Regulations have also encouraged retail investors with the reduction in minimum subscription (from Rs 50,000 to Rs 15,000). This increases the liquidity for the entire REITs market and allows greater participation from young retail investors."

With regard to stock performance of listed REITs, Mindspace REIT delivered the highest absolute returns of 8.11 per cent year to date till October 31, 2022. For the same period, Brookfield India REIT was the second

best performing listed REIT with 7.30 per cent absolute returns followed by Embassy REIT with 1.40 per cent.

Blackstone Group is planning to list the next REIT in the country and India's first retail REIT 'Nexus Select Trust' along with Select Citywalk and other shareholders according to media reports.