A joint venture between Blackstone Group Lp and Embassy Property Development, the Embassy Office Parks REIT is India’s first listed Real Estate Investment Trust (REIT). Since its listing in April, the Embassy Office Parks REIT witnessed 35% appreciation in its price at a time when the whole realty sector is facing a liquidity crunch.
Consequently, several commercial realty developers with income-producing assets portfolio are looking forward to listing their holdings through REIT. Investors’ preference for the listed REIT over last two quarters backed by the REIT’s revenue performance and dividend distribution apart from low demand of listed realty firms are also gaining interest in monetizing income-yielding portfolios through REITs.
From its listing price of Rs 300 per unit, the Embassy Office Parks REITs’ witnessed around 35% appreciation in the last six months. The prices are much higher compared to that of the other Asian contemporaries.
Experts believe that the rise in prices in the REIT is majorly because of the quarterly dividend distribution of 1.8% or Rs 5.4, which is higher than the realty companies have distributed annually. The first and only REIT listing in India is a part of London Stock Exchange’s FTSE indices – FTSE APAC and FTSE All-World Mid-Cap list. With the rise in market capitalization to over Rs 31,000 crore based on the appreciation in stock price, Embassy REIT is qualifying for a large-cap categorization.
REITs have significantly succeeded in the developed nations; the global investors are rushing towards the developing countries such as India where the demand for grade A commercial asset is significant. Besides, it has also allowed the investors to make investments into the commercial real estate segment at low entry levels, which was not available to them earlier.
Those investors who are looking for diversifying their investment portfolios REITs is amongst the most viable options.