Listed real estate investment trusts (REITs) have come together to form The Indian REITs Association (IRA), which was launched on Tuesday under the guidance of the Securities and Exchange Board of India and the Ministry of Finance.
Brookfield India Real Estate Trust, Embassy REIT, Mindspace Business Parks REIT, and Nexus Select Trust are the founding members of IRA. The non-profit trade organisation will work towards the growth and development of REITs in the country. It will collaborate with SEBI, to advocate for both business and investor interests
In a statement, the newly formed entity said it aimed to be a body of integrity and excellence, and would foster industry best practices benchmarked to global REIT standards. The IRA will work with the authorities and regulators to aid policy initiatives like the SEZ reforms for the further growth of REITs, it said.
The four listed REITs together have ₹1.2 lakh crore in gross Assets Under Management (AUM), market capitalisation of over ₹75,000 crore, and a portfolio covering 113.5 million square feet of Grade A office and retail space nationwide.
In just four years after the first REIT was listed in 2019, they have raised over ₹25,500 crore of equity capital through primary issuances, including initial listings and follow-on offerings, and ₹18,890 crore of debt capital. As of June 30, 2023, there were over 2 lakh unitholders in the four REITs.
Solomon Arokiaraj, Joint Secretary, Department of Economic Affairs, said in the statement, “REITs are innovative financial instruments that provide an opportunity to invest in a portfolio of income-generating real estate assets with relatively smaller ticket sizes, while retaining liquidity, which is generally missing in the case of real estate investments.”
He added that, globally, REITs were instrumental in the capitalisation of real estate markets and there was “enormous potential” to replicate that success in India.