REIT monetisation potential prompts retail-led realty assets’ single ownership structures
real estate assets through the Real Estate Investment Trusts (REITs) has infused higher transparency in transaction and management structures of these assets and realtors are now aiming to develop investment grade assets with single ownership structure.
The developers have started appreciating that retail is a specialized asset class that constantly requires upgradation of tenant mix and the property with focus on parameters such as zoning and mall management to ensure monetization of the asset.
Indian retail-led real estate is expected to witness a supply of over 38 million sq ft between the second half of 2023 and 2027. Of the existing retail real estate stock across the top seven cities of India, around 44 million sq ft of retail assets offer a potential to be listed as a REIT and of these, more than half are in Mumbai and NCR-Delhi region, showed data from JLL India.
“India’s retail sector is on an elevated growth curve where the focus is on creating an innovative built environment, greater connections with the consumers, and curating physical storefronts in untapped regions of the country including tier II and III cities,” said Rahul Arora, Head of Office Leasing Advisory and Retail Services, India, JLL.
Following the success of three office properties-led REITs, India’s public markets saw the launch of the first retail assets-led REIT, Nexus Select Trust, earlier this year.
This Blackstone-backed REIT with 9.9-million-sq-ft leasable area across 14 cities saw over 5.5-times oversubscription boosting confidence in the sector.
“Among top cities, Delhi-NCR is expected to lead in contribution towards upcoming mall supply with a 31% share, followed by Chennai’s 16% and Hyderabad’s 14% share. Around 18% of this upcoming
