More REIT issues in the offing

Mumbai: Following the success of the country's first REIT issue by Embassy Office Parks last week, HDFC chairman Deepak Parekh on Monday said two to three companies have already approached the mortgage lender to be an investor for such issues over the next 12 months.

"REITs are a good instrument class but not well understood here. Assets in REITs with assured yields and after three years there is an increase in rentals. Therefore, there is more value and more capital appreciation" Parekh told reporters on the sidelines of the listing of the Embassy REIT on the NSE.

He said, REITs offer investors who are mostly HNIs, insurance firms and institutional investors, with guaranteed returns of 8-8.5 per cent. "I think the timing for this REIT was right with the good interest rate and pricing.

Two-three of our clients are in talks with us to invest in them over the next couple of quarters. I think we will see more REITs being launched soon," Parekh added.

Talking about the response from foreign investors, he said, "January-February have not been good for FPI investments as we saw outflows.

However, March witnessed massive inflows mainly on the back of expectations that a stable government will be in power after the forthcoming polls.