Asia REIT Market Insight 2023

2022-2023 ASIA REIT MARKET INSIGHT

Table 3: Profiles of India REITs

4.2 India REIT Market

Embassy Office REIT

Brookfield Office REIT

Mindspace Office REIT

Nexus Select Retail REIT*

A total of four REITS were listed in the India market as of May 2023, comprising three office REITs and one retail REIT. The three office products have been in existence for more than two years, while the retail product was a new listing in May 2023. REIT regulations have been in place since 2014, but all four REITs have been launched in a four-year period since 2019. REITs have proven popular with both institutional and retai l investors in India since the first l isting in 2019, with each of the four IPOs gaining positive subscription attention. The office REITs’ operational asset distribution is largely concentrated around major cities such as Mumbai, Bengaluru, Delhi-NCR, Hyderabad, and Pune. However, the Nexus Select retail REIT has a wider operational spread that also includes second-tier cities. The three office REITs hold approximately 74 million sq ft of completed office stock as of March 2023, with an additional 21 million sq ft portfolio at various stages of development. The combined portfolio size, including both completed and under-construction, accounts for approximately 14% of India’s total Grade A office stock today. Looking at the success of the existing office REITs, more developers are now consol idating their office assets for bundling into REIT products, with market estimates suggesting we could see an additional 90 to 95 million sq ft unfold soon. Consequently, there could be approximately 180 million sq ft of office space held by REITs by the end of 2024. We estimate that this volume may account for approximately 22% of overall Grade A office stock at that time. Moreover, Indi a ’s market regu l ator SEBI has been consistently making efforts towards making REITs and InVITs more transparent and friendly for retail investors. These moves are helping to further encourage participation from small investors in the real estate growth story.

Listing month

Apr-19

Feb-21

Aug-20

May-23

Overall IPO subscription status Completed area (MSF) (Mar-23) U/C + F/D area (MSF) (Mar-23) Latest occupancy rate (Mar-23)

O/S by 2.57x

O/S by 8.0x

O/S by 13x

O/S by 5.5X

34.3

14.3

25.8

9.8

7.9 + 2.8

0.6 + 3.9

2.5 + 3.7

N.A.

86%

84%

89%

96%

Bengaluru (75%), Mumbai (10%), Pune (9%) and NCR Delhi (6%)

NCR-Delhi (68%), Kolkata (22%), Mumbai (11%)

Hyderabad (44%), Mumbai (36%), Pune (17%), Chennai (3%)

Distribution of operational office assets (Mar-23)

South India (36%), West (34%), North (25%), East (5%)

Source: latest investor presentations on website; *ICICIdirect brokerage report on Nexus Select IPO (May-23) Note: O/S= over-subscribed; U/C= under-construction; F/D= Future Development

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