Saturday, 14 May 2016

REITs in retail would bail out locked investments

Real Estate Investment Trust Funds (REIT) in the retail sector would be saviour for all the investments locked in those high costs assets, according to experts.



“There is around 70-75 million sq feet of retail real estate space that is REITable including 16 million in Mumbai and 25 million in Delhi-NCR,” KPMG in India partner and head of building, construction and real estate sector Neeraj Bansal said, while speaking at the India Shopping Centre Forum 2016.


Globally, retail asset is almost a quarter of global REITs value with 26% in retail, 12% in office, 27% in diversified and 3% in hospitality while in the Asian region, retail accounts for 19%, office for 12%, diversified 56% and hospitality being 1%, Bansal added.


According to another expert, some countries have certainly seen higher percentage of success due to introduction of REITs earlier. “Unlike in India, where REITs are just about getting introduced, the countries with several decades of REIT exposure has seen higher percentage of success in US, Australia and Singapore and limited success in other countries like Hong Kong,” the expert said.


REIT accounts for 53%, 50% and 78% of the real estate market in US, UK and Australia, respectively while it was a miniscule 6% in Hong Kong, the expert added.