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Business News/ Companies / News/  Brookfield’s Reit to uplift commercial realty
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Brookfield’s Reit to uplift commercial realty

The investment firm plans to list its Reit by 2020-end
  • Institutional as well as retail investors are likely to take positive view on the Brookfield issue, driven by successful listing of the first two Reits—Embassy Office Parks and Mindspace Business Parks
  • ReutersPremium
    Reuters

    Global investment firm Brookfield Asset Management’s proposal to launch Reit public issue for raising over 4,000 crore augurs well for the future of India’s office market and will boost investment and 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 filed a draft document with Securities and Exchange Board of India (Sebi) last week to launch its Reit issue and monetize commercial real estate. It plans to list Reit by the 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 2019, Embassy Reit raised 4,750 crore, while Mindspace raised 4,500 crore in August this year through their issues. In response to a query on the impact of Brookfield’s proposed Reit issue on commercial real estate, top real estate consultants and players noted that this demonstrates the strength of office market.

    Anshuman Magazine, chairman and chief executive officer- India, South East Asia, Middle East and 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," he added.

    Anarock chairman Anuj Puri said the successful launch of India’s second Reit despite the ongoing corinavirus pandemic has sent out positive signals and paved the way for others to follow suit.

    “The key 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 chief executive officer and country head Ramesh Nair said, “Reits not only offer quarterly dividends, but also growth in capital values."

    He added that the only concerns that investors may have at this stage could be rental escalations and mark to market opportunities. Mumbai-based Kalpataru Ltd’s 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."

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    Published: 05 Oct 2020, 08:10 AM IST
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