Investors eye REITs, 100 m sqft maybe listed on exchanges by year-end

Retail and institutional investors are flocking to real estate investment trusts (REITs) and by the end of the year close to 100 million sq ft are likely to be listed on the exchanges.

“We expect $2-3 billion investment to exchange hands by March 2021. Some vacancies at Tier-2 tenants and developments is expected,” Sanjay Dutt, Managing Director & CEO, Tata Realty & Infrastructure Ltd, Chairman, FICCI Real Estate Committee, said, after releasing the 25th Knight Frank, FICCI-Naredco real Estate Sentiment Index Q2 2020 Survey.

Shishir Baijal, Chairman and Managing Director of Knight Frank India, said, “With some macroeconomic indicators showing marginal improvement and with the impending festival season in the second half of the year, stakeholders have shown improved sentiments compared to the previous quarter, albeit they have remained in the pessimistic zone. At this juncture, we expect the lockdown to ease by the advent of the festival season, helping to revive economic activity and propel conversion of the pent- up demand.”

Niranjan Hiranandani, National President, NAREDCO and Founder & MD, Hiranandani Group, said, “In the backdrop of current liquidity, labour and raw material shortage, industry seeks handholding by the government to ease out economic distress. This could be done by reduction in taxes, levies; stamp duties and GST for a stipulated time frame to generate demand which is imperative to kick start the economic uptick. In addition to the fiscal stimulus, industry pegs high hopes on one-time debt restructuring, additional stress fund and enhanced credit flow supply to facilitate working capital requirement of businesses to revive back.”

With continued economic stress and ambiguity regarding recovery, the current sentiments of the real estate stakeholders in India have been recorded at a low 22 in Q2 2020 (April-June).

The survey indicated that the ‘Future Sentiment Score’ of stakeholders, though still in the pessimistic scoring zone, has seen improvement at 41 in Q2 2020, against 36 in Q1 2020.

The pandemic has resulted in a downturn in economic activity which has impacted the current sentiment Score of the stakeholders recording a low of 22 in Q2 2020.

The residential market across the parameters of new launches, sales and prices continued to be muted in Q2. In terms of supply, around 46 per cent of the respondents believe that the new office supply will continue to deteriorate in the next six months, whereas the remaining 55 per cent still believe that new supply will either improve or remain stagnant.

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