The credit rating agency ICRA has assigned a rating of Provisional (ICRA) AAA with stable outlook to the first real estate investment trust (REIT) to be launched in India later this year.
Embassy Office Parks REIT (Embassy REIT) is the first SEBI-registered REIT to file draft offer documents for a public listing in India. “The assigned Provisional rating draws strength from the large and diversified leasing portfolio of Embassy REIT, which is spread across multiple office parks in different cities. The business profile is further enhanced by the diversified tenant base in the office parks, which comprises leading multi-national and domestic corporations,” Shubham Jain, Group Head at ICRA said in a release on Monday.
“The rating also benefits from the low initial leverage in the REIT group, which will be aided by prepayment of outstanding using the net proceeds from REIT listing,” he added.
REITs in India are governed by the SEBI Real Estate Investment Trust Regulations, 2014. They act as vehicles for owning and operating revenue generating real estate assets and distributing cash flows from them to the unit holders. REITs provide an avenue for retail as well as institutional investors to participate in real estate ownership and are an established asset class in overseas markets such as the US, Singapore and Japan.
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