India looks to tap private equity behemoths for Reits with PSUs

Subscribe to enjoy similar stories.MUMBAI: The Centre is exploring partnerships with real estate-focused global investors to form real estate investment trusts (Reits) that will house optic fibre networks and land assets of central public sector enterprises (CPSEs), multiple people with knowledge of the matter said. The assets under consideration could also be repurposed for data centre infrastructure, potentially widening investor appeal.The plan, still at an early stage, is part of a broader push to accelerate government asset monetization following the Union budget for 2026-27, which proposed using Reit structures to recycle state-owned assets and attract institutional capital.

Reits allow asset owners, in this case the government, to convert infrastructure into tradable securities, unlocking capital while retaining ownership of the underlying assets as a sponsor, generating income through long-term leases.“The discussions are still early, and there's no official mandate yet. But monetizing optic fiber networks of these companies and their surrounding infrastructure remains the lowest hanging fruit for a divestment strategy,” one of the people cited above said, requesting anonymity.The trusts are expected to hold assets from companies like Bharat Sanchar Nigam Ltd, RailTel Corp.

of India Ltd, and Power Grid Corp. of India Ltd, the person said.

These entities operate extensive fibre networks and, in some cases, control land parcels that could be monetized under existing guidelines.Some of global investors with real estate muscle include Blackstone Inc. and Brookfield Corp., both of which operate large-scale data centre platforms in India and are among the most active investors in the country’s Reit ecosystem.Emailed