New Delhi: Global investment firm Brookfield‘s proposal to launch REIT public issue for raising over Rs 4,000 crore augurs well for the future of India’s office market and will boost investment as well as demand-supply in this segment, according to realty experts.
Institutional as well as retail investors are likely to take positive view on the Brookfield issue, driven by successful listing of the first two Real Estate Investment Trusts (REITs) — Embassy Office Parks and Mindspace Business Parks, they said.
Brookfield last week filed draft document with market regulator Sebi to launch its REIT issue and monetise commercial real estate. It plans to list the REIT by end of this year.
This will be the third REIT IPO to hit the market after Embassy Office Parks and Mindspace Business Parks REITs. In April last year, Embassy REIT raised Rs 4,750 crore, while Mindspace raised Rs 4,500 crore in August this year through their issues.
In response to a PTI query on impact of Brookfield’s proposed REIT issue on commercial real estate, top real estate consultants and players noted that this demonstrates the strength of the office market.
Anshuman Magazine, Chairman & CEO – India, South East Asia, Middle East & Africa, CBRE, said the REIT continues to be viewed as one of the favoured investment avenues given the comparatively resilient underlying cash flows.
“We are hopeful that investors will look at REITs as a stable income generator driven by strong occupancies in India’s office market backed by lease commitments from corporate occupiers. This should also structurally drive office absorption and create opportunities across the commercial real estate market moving forward,” he added.
Anarock Chairman Anuj Puri said the successful launch of India’s second REIT (Mindspace) despite the ongoing pandemic has sent out positive signals and paved the way for others to follow suit.
“The major positive of the recent listing is that the geographical spread of the overall REIT portfolios has been widened. While Embassy REIT largely focused on southern markets and K Raheja towards the western market, the Brookfield REIT has assets in the north and eastern region,” he said.
JLL India CEO and Country Head Ramesh Nair said: “With the success of Embassy and Mindspace REITs, the interest from both institutional and retail players is expected to be very positive. REITs not only offer quarterly dividends, but also growth in capital values.”
He said the only concerns that investors may have at this stage could be rental escalations and mark to market opportunities.
Mumbai-based Kalpataru Ltd Managing Director Parag Munot said: “It augurs well for Indian commercial real estate and will enthuse more developers to enter into premium commercial real estate development.”
Nidhi Marwah, MD South Asia & GCC, The Executive Centre, said the industry has witnessed the encouraging performance of both Raheja REIT and Embassy REIT in the backdrop of a global pandemic and economic instability.
“Brookfield would be the third REIT to be listed in recent times. This will further embolden the industry, taking us one step closer to a post covid market,” she said.
Hong Kong based-TEC provides premium serviced office to corporates.
Knight Frank India CMD Shishir Baijal said the Brookfield filing for REITs is a great indicator of the strong future that commercial real estate has in India.
“After the successful listing of Embassy and Mindspace REITs, this rides high on the long-term investor confidence. REITs will help raise capital and improve the fund flows into the sector as well as allow greater participation from retail investors in the asset class,” he said.
Baijal expects more players to enter the REITs market to monetise their office assets.
Savills India CEO Anurag Mathur said: “The listing of two REITs and now the upcoming third one by Brookfield clearly demonstrates that the long-term hope on commercial office market remains strong and that investors have far greater faith in such organised investment tool as compared to investing in physical real estate.”
He said it re-enforces REITs as a viable investment alternative and re-affirms the strength of the commercial office real estate.
Mathur said the past two performances have also instilled confidence among investors of REITs being a viable investment option.
“Most importantly, it has also opened up new avenues for retail investors to own a piece of real estate by shelling out a small amount which would not have been possible otherwise,” he added.
Piyush Gupta, MD, Capital Markets & Investment Services at Colliers International India, said the commercial real estate segment continues to show strong interest from domestic and international investors.
“The REIT listings provide a great avenue for Grade A asset development as a defined exit route for all local players is being established,” said Saurabh Shatdal, MD-Capital Markets, Cushman and Wakefield.
Tushar Mittal, managing director, Studiokon Ventures — which is into designing of office interiors, said India is emerging as the most attractive and cost-efficient destination for MNCs.
“Given the talent pool and tech savvy generation, demand for Grade-A office is expected to increase, once we overcome the coronavirus pandemic. This shift in demand will work to the advantage of REIT and the commercial real estate ecosystem,” Mittal said.
Shrinivas Rao, CEO-APAC, Vestian said the possible impact of COVID-19 on Brookfield’s office portfolio will certainly make it an interesting REIT offering for the analysts to take a call on.
Net office space leasing stood at an all-time high of 45-50 million sq ft in 2019 but the absorption is expected to fall 30-50 per cent this year due to COVID-19 pandemic.
Real estate investment trust (REIT), a popular instrument globally, was introduced in India a few years ago aimed at attracting investment in the real estate sector by monetising rent-yielding assets.
It helps unlock the massive value of real estate assets and enable retail participation.
NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.
Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.
“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.
Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.
Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.
Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.
In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.
The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.
And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
