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Macrotech Developers Ltd is looking at a real estate investment trust for its digital infrastructure assets, a $1-billion platform funded by Bain Capital and Ivanhoe Cambridge. The digital infrastructure platform was announced in May 2022 with the mandate to invest $1 billion to create 30 million square feet of operating assets that will include logistics and industrial parks, as well as in-city fulfilment centres.
The platform has ainvested in two projects so far - a 110-acre logistics and industrial park in Palava City and an in-city warehouse in Kurla, a total area of around 5.7 msf. The company, that sells houses under the ‘Lodha’ brand, expects the platform to ramp up in the current financial year and over the next few years. Once it matures and reaches sufficient scale, the company intends to float a REIT as an exit opportunity to monetise the platform.
The platform is also scouting for acquisitions across India, including land and projects that are under development.
Lodha has a sizeable annuity portfolio consisting of commercial assets such as offices, a mall, as well as logistics parks and warehouses.
The company is aiming to generate annuity income of Rs 500 crore a year by FY26 and reach Rs 1,500 crore by the end of the decade, and a significant contribution will come from its digital infrastructure platform. It is in discussions with several global and retail brands to set up their fulfilment centres in the areas identified. In FY23 its annuity income from the office and mall portfolio was around Rs 260 crore.
The company is building up its existing commercial portfolio of offices and retail assets. It has also scrapped a plan to sell about 6.5 lakh square feet of commercial assets consisting of the mall and an office complex and instead, they will be drivers of future growth while also strengthening its balance sheet.
The reasonably good performance of the three office-based REITs and one retail-focused REIT is inspiring other real estate developers to launch REITs, especially in cases where there are stable rent-yielding assets.
Also read: DLF plans expansion of retail and office portfolios, hints at possible REIT offering
Prestige Estates Projects and DLF are the other two major real estate developers that have been talking about launching REITs in the near future.
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