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New Delhi: Markets regulator <keyword id="19901201" type="General" weightage="100" keywordseo="Sebi" source="keywords">Sebi</keyword> has proposed allowing Real Estate Investment Trusts (<keyword id="20186402" type="General" weightage="20" keywordseo="REITs" source="keywords">REITs</keyword>), Small and Medium REITs (SM REITs) and Infrastructure Investment Trusts (<keyword id="20186403" type="General" weightage="20" keywordseo="InvITs" source="keywords">InvITs</keyword>) to use <keyword id="21737868" type="General" weightage="20" keywordseo="interest-rate-derivatives" source="keywords">interest rate derivatives</keyword> for <keyword id="23778373" type="General" weightage="20" keywordseo="hedging-risk" source="keywords">hedging risk</keyword>. Also, the regulator has suggested approving locked-in units for REITs and InvITs to be transferred among sponsors and their groups, similar to rules for promoters in listed companies, to help sponsors manage their holdings without compromising "skin in the game". Additionally, Sebi has suggested permitting fixed deposits to be considered as cash equivalents when calculating leverage for REITs and InvITs, clarifying credit rating requirements for REIT and InvIT borrowings, and setting a timeline for filling vacancies on their boards and expanding the asset base for REITs and SM REITs. The regulator has also proposed to permit REITs to invest in liquid mutual funds. It has suggested measures to facilitate ease of doing business for REITs and InvITs, along with investors' protection. According to its consultation paper, Sebi is considering allowing REITs and InvITs to hedge against interest rate fluctuations by using derivatives like interest rate swaps. This could help stabilise cash flows, reduce risks, and protect unitholder interests, especially for long-term infrastructure projects. It is also proposed to define "Common Infrastructure" for REIT regulations. To enhance business flexibility for REITs, it has been proposed to clarify that facilities like power plants, heating/cooling systems, water treatment, and waste treatment plants -- serving one or more REIT assets -- will qualify as "common infrastructure" under REIT rules. This applies even if these facilities are not located within a single project due to their technical requirements. These facilities should supply and be used exclusively by REIT assets. For power plants, however, any excess power can be sold to the state utility/grid as per regulations, with any credits or payments going towards the benefit of REIT assets. To improve transparency, it has been proposed to amend the governance norms for quarterly reporting of InvITs. Currently, quarterly results for the investment manager and its business segments are presented to the investment manager's board, but there is no direct requirement for InvITs to report their performance. The proposed amendment would clarify that quarterly results should specifically reflect the performance of the InvITs themselves, not just the investment managers. This change aligns InvIT regulations with REIT regulations, where the focus is on the quarterly results of the REIT itself. Also, it has been suggested to align the composition of NRCs in REIT and InvIT managers with listed companies under the LODR regulations. Currently, all NRC members for REITs and InvITs must be independent directors. The proposal allows a mix of independent and non-executive directors, similar to listed companies. To enhance investors' protection, Sebi has suggested reviewing conditions for InvITs to borrow beyond the 49 per cent limit, assessing REIT investments in unlisted equity shares and outlining the roles and responsibilities of trustees for REITs, InvITs, and SM REITs. In a separate consultation paper, the regulator has proposed a regulatory framework for "restricted return InvITs" to provide infrastructure investors with predictable returns by setting limits on both upside gains and downside protection. The proposed framework for restricted return InvITs is designed to provide investors with structured returns, capped at both minimum and maximum levels to offer stability. Restricted return InvITs would include downside protection -- a minimum assured return -- and/or an upside restriction, a cap on returns -- depending on the arrangement. These investments would be limited to sophisticated investors who meet high minimum investment thresholds, with each unit priced at a minimum of Rs 500 crore and total InvIT assets of at least Rs 50,000 crore. Investors would be required to sign a waiver and undertaking form, acknowledging their understanding of the structured returns and risks involved, including the transfer of any excess returns to the sponsors. This waiver should be submitted before purchase in both primary and secondary markets, with compliance overseen by merchant bankers or brokers. The Securities and Exchange Board of India (Sebi) has sought public comments on both consultation papers by November 13.

Sebi proposes to allow InvITs, REITs, SM REITs to use interest rate derivatives for hedging risk

<keyword id="24068881" type="General" weightage="100" keywordseo="Equity-investments-in-Indian-real-estate" source="keywords">Equity investments in Indian real estate</keyword> may rise 49% to $11 billion this calendar year amid strong demand for properties, according to CII and CBRE. In the 2023 calendar year, the equity investments in real estate stood at $7.4 billion. Industry body CII and real estate consultant CBRE on Wednesday released a joint report titled 'Leading the Charge: Crafting the Skylines of Tomorrow' at the annual CII Realty 2024 conclave. Equity capital inflows touched $8.9 billion between January and September, registering a 46% year-on-year growth. "Overall equity investments in 2024 in the real estate sector are set to hit a new record surpassing $10 billion for the first time," the report said. With a resurgence in investment inflows in built-up office assets and a strong acquisition pipeline for land in the residential sector, the overall equity investments in 2024 would be in the $10-11 billion range. During January-September, institutional and collective vehicle investors accounted for nearly 40% of the overall investments. Developer companies led the total capital inflows with more than 41% share in this period. Domestic investors (predominantly developers) invested nearly USD 6 billion during the first nine months of the calendar year, dominating the overall capital inflows with an almost 65% share. In comparison, foreign investors contributed about $3.1 billion during the same timeframe. Notably, North American and Singaporean investors were the significant contributors, representing about 85% of all foreign capital inflows. Anshuman Magazine, Chairman &amp; CEO, India, South-East Asia, Middle East &amp; Africa, CBRE, said, "Projection for 2024 equity investments between $10-11 billion, highest-ever, underscores continued investor interest in the growing <keyword id="23870227" type="General" weightage="20" keywordseo="real-estate-market-in-India" source="keywords">real estate market in India</keyword>." With SEBI's SM-REIT framework, he said, smaller but high-quality assets in Tier-II markets would also present new avenues for strategic capital deployment. "We believe this regulatory support will add much-needed transparency, enabling a more diversified investment base and encouraging institutional participation across these markets," Magazine said. Going ahead, he said this growing diversification will not only solidify India's real estate sector but also pave the way for future growth across emerging asset classes.

Equity investments in Indian real estate may rise 49% to record $11 billion this year, says CII-CBRE report

Capital markets regulator <keyword id="20378396" type="General" weightage="20" keywordseo="Sebi-Chief" source="keywords">SEBI Chief</keyword> <keyword id="19922107" type="General" weightage="20" keywordseo="madhabi-puri-buch" source="keywords">Madhabi Puri Buch</keyword> on Monday refrained from commenting on the investment vehicle, <keyword id="20024284" type="General" weightage="20" keywordseo="real-estate-investment-trusts" source="keywords">Real Estate Investment Trusts</keyword> (REITs), saying if she comments on the subject, she will be accused of <keyword id="20339010" type="General" weightage="20" keywordseo="conflict-of-interest" source="keywords">conflict of interest</keyword>. The remarks came as US short-seller <keyword id="20016892" type="General" weightage="20" keywordseo="Hindenburg-Research" source="keywords" meta.keywordsubtype="org" meta.entityname="Hindenburg Research" meta.hostid="261" meta.entityid="Hindenburg Research">Hindenburg Research</keyword> raised questions about a potential conflict of interest involving Buch and private equity major <keyword id="20144468" type="General" weightage="20" keywordseo="Blackstone" source="keywords" meta.keywordsubtype="org" meta.entityname="Blackstone" meta.hostid="261" meta.entityid="Blackstone">Blackstone</keyword>. Her husband Dhaval Buch is a senior advisor with Blackstone, a major player in the <keyword id="20009947" type="General" weightage="100" keywordseo="REIT" source="keywords">REIT</keyword> space. However, the couple refuted the allegations. Also, Hindenburg alleged that SEBI's recent amendments to REIT regulations 2014 favoured a specific financial conglomerate, which the markets regulator denied. Speaking at an event organised by industry body CII, Buch said," If I utter the word REITs, I am accused of conflict of interest". REITs are a new concept in the Indian market but have been a popular choice globally for their lucrative returns and capital appreciation. A REIT is made up of a portfolio of commercial real estate assets, the majority of which are already leased out. Meanwhile, the <keyword id="19895371" type="General" weightage="20" keywordseo="Congress" source="keywords" meta.keywordsubtype="org" meta.entityname="Congress" meta.hostid="261" meta.entityid="Congress">Congress</keyword> on Monday levelled fresh conflict of interest allegations against Buch and asked Prime Minister <keyword id="19895781" type="General" weightage="20" keywordseo="narendra-modi" source="keywords">Narendra Modi</keyword> to come clean as the head of the appointments committee of the cabinet on her appointment. At a press conference, the Congress alleged that since the current SEBI chairperson took office in 2017, she has not only been drawing a salary from SEBI but has also been holding an office of profit at the ICICI Bank, continuing to receive income from them to this very day. SEBI didn't make any comment on the allegations made by the Congress. Last week, the SEBI Chief stated that there has been a positive response to small and medium REITS (real estate investment trusts) and industry players came forward for regulations on such entities. Recently, the Securities and Exchange Board of India (SEBI) implemented regulations for small and medium real estate investment trusts (SM REITS) aimed at significantly increasing investor interest in fractional ownership of real estate assets.

If I say anything on REITs, will get accused of conflict of interest, says SEBI Chief

In its latest report, US-based investor activist firm Hindenburg, lashed out at market regulator <keyword id="19901201" type="General" weightage="20" keywordseo="SEBI" source="keywords" meta.keywordsubtype="org" meta.entityname="SEBI" meta.hostid="261" meta.entityid="SEBI">SEBI</keyword> chief <keyword id="19922107" type="General" weightage="20" keywordseo="Madhabi-Puri-Buch" source="keywords">Madhabi Puri Buch</keyword>, alleging her and her husband, <keyword id="22743439" type="General" weightage="20" keywordseo="Dhaval-Buch" source="keywords">Dhaval Buch</keyword> of having stakes in the same offshore funds which had previously been utilised by Gautam Adani's brother, <keyword id="20283220" type="General" weightage="20" keywordseo="Vinod-Adani" source="keywords">Vinod Adani</keyword>. Earlier last year, Hindenburg had come out with a report, arguing that the research firm had identified multiple instances where they had found that Adani Group was complicit in stock manipulation, and accounting frauds. The report mentioned around 38 Mauritius based shell entities which were directly controlled by Vinod Adani, or his associates, in addition to other suspected entities under his control, which were based out of Cyprus, the UAE, Singapore and Caribbean islands. It had also alleged that SEBI's distinct lack of regulatory action against the conglomerate, despite overwhelming evidence provided by them was disappointing. Now, in its latest report, it notes that "SEBI’s unwillingness to take meaningful action against suspect offshore shareholders in the Adani Group may stem from Chairperson Madhabi Buch’s complicity in using the exact same funds used by Vinod Adani, brother of Gautam Adani". We decode all that you need to know about the <keyword id="22758620" type="General" weightage="100" keywordseo="Adani-Hindenburg-saga" source="keywords">Adani-Hindenburg saga</keyword>. <h2>What is Buch being accused of?</h2>Three major things, really. First, quoting various whistleblower documents, Hindenburg alleged that during her tenure as a whole-time member at SEBI between 2017 and 2022, Buch maintained a 100% stake in Singapore-based Agora Partners. Two weeks post her appointment as SEBI's chairperson in March 2022, Buch privately emailed the fund, asking them to transfer all her share's to her husband's name. Second, during her tenure, Madhabi's husband, Dhawal Buch had been appointed as senior advisor at <keyword id="20144468" type="General" weightage="20" keywordseo="Blackstone" source="keywords" meta.keywordsubtype="org" meta.entityname="Blackstone" meta.hostid="261" meta.entityid="Blackstone">Blackstone</keyword>, a prominent global name in real estate and private equity. To this date, he maintains this position. Blackstone has, till date, sponsored three <keyword id="20186402" type="General" weightage="20" keywordseo="REITs" source="keywords">REITs</keyword> in India, including Embassy Office Parks REIT, Mindspace REIT, and Nexus Select Trust. As such, this results in a massive conflict of interest. The <keyword id="20016892" type="General" weightage="20" keywordseo="Hindenburg-Research" source="keywords" meta.keywordsubtype="org" meta.entityname="Hindenburg Research" meta.hostid="261" meta.entityid="Hindenburg Research">Hindenburg research</keyword> alleges that during Buch significantly altered regulations, in order to favor investments in REITs (real estate investment trusts). As the short seller noted, "Buch touted REITs as her favorite products for the future, and urged investors to look positively upon the asset class". But, as the firm highlights, she did not explicitly ever mention that her husband is associated with Blackstone, a company which stands to gain significantly from such investments. Thirdly, as Hindenburg research explains, Madhabi currently holds a 99% stake in Agora Advisory, an India-based consulting firm where her husband also serves as a director. Per reports, at the end of FY22, the firm's revenue stood at Rs 19.8 million, which is about 5 times her disclosed salary as a whole-time SEBI member. <h2>How has Buch retorted to each of these allegations? </h2>On first, Buch notes that investment in the fund cited by Hindenburg in its research had been made in 2015, when she held no public position of note, and was 2 years away from joining SEBI as a whole-time member. Moreover, the decision to invest in this fund was largely because Anil Ahuja, who was the erstwhile chief investing officer (CEO) of the fund, was a childhood friend of Dhaval Buch, apart from having a long career in investing, having worked with Citibank and JP Morgan. During this time, the fund did not invest in any bonds or shares issued by companies of Adani Group. On second, Buch made it clear that Dhaval was hired by Blackstone on account of his deep expertise in supply chain management. Once this happened, Blackstone was immediately added to Madhabi's recusal list. Additionally, regulatory decisions are not solely taken by the chairperson, but come into existence after intense public discussion. And thirdly, both Agora Advisory in India, and Agora Partners in Singapore were made dormant after Buch was appointed as SEBI chairperson. Per the joint statement issued by the Buchs, "These companies (and her shareholding in them) were explicitly part of her disclosures to SEBI." <h2>What kind of financial impact are we estimating? </h2>Stocks of Adani companies found themselves swimming in red today. Adani Ports dipped by 1.78%, while Adani Enterprises and ACC fell by over 1% each during trade today. Adani Total Gas plunged by over 3%, while Adani Wilmar also sunk by over 2%. With the shares cumulatively experiencing over 7% fall, estimates suggest that over Rs 53,000 crore worth of investor wealth was wiped off today. The news does not bode well for India's mutual fund companies, who have a total of Rs 41,814 crore on Adani companies. As for REITs, data from IRA (Indian REITs Association) suggests that there are, at present, four listed REITs on the Indian stock exchanges, collectively managing assets worth over ₹1,40,000 crores and serving more than 240,000 unitholders. "These REITs have distributed over ₹18,000 crores, with the market capitalization of this rapidly growing asset class reaching approximately ₹80,000 crores", the association notes. As the research firm disclosed, it made Rs 34 crores shorting (borrowing a stock who's value you anticipate will fall, and then sell it in markets to earn profits). According to media reports, about 111 mutual fund schemes have invested around Rs 14,000 crore in Adani Ports and SEZ. How has Hindenburg doubled down? In a fresh salvo, Hindenburg notes that this admission confirms that Madhabi and Dhaval Buch had indeed, "invested in an obscure Bermuda/Mauritius fund structure, alongside money allegedly siphoned by Vinod Adani, the brother of Gautam Adani". "She also confirmed the fund was run by a childhood friend of her husband, who at the time was an Adani director. SEBI was tasked with investigating investment funds relating to the Adani matter, which would include funds Mrs. Buch was personally invested in, and funds by the same sponsor which were specifically highlighted in our original report. This is obviously a massive conflict of interest," the firm said. Another accusation that has gone the SEBI chairperson's way is that even while she was serving as SEBI chief, Buch continued to earn revenues from her active consulting firms, and also making deals under her husband's name all the while she served as SEBI's whole-time member. <h2>What's next? </h2>Taking note of Hindenburg's report, SEBI released a statement asking investors to "remain calm and exercise due diligence before reacting to such reports. Investors may also like to take note of the disclaimer in the report that states that readers should assume that Hindenburg Research may have short positions in the securities covered in the report", it said. "The allegations made by Hindenburg Research, against the Adani Group, have been duly investigated by SEBI. Hon’ble Supreme Court in its Order of January 3, 2024 noted that SEBI had completed twenty–two out of twenty–four investigations into the Adani group. Subsequently, one more investigation was completed in March 2024, and one remaining investigation is close to completion. During the ongoing investigation in this matter, more than 100 summons, around 1,100 letters and emails have been issued to seek information", it continued.

Adani Hindenburg case: All your questions answered

Real Estate Investment Trusts (REITs)

Mumbai, <keyword id="21027898" type="General" weightage="20" keywordseo="indian-real-estate-investment-trust" source="keywords">Indian Real Estate Investment Trust</keyword> (REIT) industry on Wednesday pitched for the entities to get access to direct bank lending and classification as equities. At present, such vehicles can issue bonds or borrow from non-bank lenders or mutual funds, but are prohibited to borrow from banks, said the <keyword id="21027897" type="General" weightage="20" keywordseo="indian-reits-association" source="keywords">Indian REITs Association</keyword> (IRA), a newly formed umbrella body for the five-year-old sector, which comprises four listed entities. The body's Chairman and Embassy REIT's Chief Executive <keyword id="21027895" type="General" weightage="20" keywordseo="arvind-maiya" source="keywords">Arvind Maiya</keyword> told reporters it is in touch with the RBI (<keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword>) for allowing banks to lend to such vehicles. The real estate industry is asset-heavy and needs funds regularly to buy assets for which it should be allowed to borrow directly from banks, he added. Typically, banks have access to deposits which brings down the cost of funds, and hence, the cost of borrowing can become softer for a borrowing entity. <keyword id="21027894" type="General" weightage="20" keywordseo="alok-aggarwal" source="keywords">Alok Aggarwal</keyword>, the Managing Director and Chief Executive of Brookfield India Real Estate Trust, said, at present REITs are classified as a "hybrid" instrument which creates confusion in the minds of the investors. <keyword id="21027896" type="General" weightage="20" keywordseo="maiya" source="keywords">Maiya</keyword> said classification as equities will lead to passive money coming into REITs as the instrument gets included in indices. Other geographies like Singapore, which has inspired the Indian REIT regulations, as well as the US, treat the instrument as equity, he said, stressing that all the features of the instrument are similar to equity. An industry participant said the tax advantages which it gets courtesy of the hybrid status will continue even if it is classified as equity, while another hoped that it can also get gains from a taxation front courtesy of the Long Term Capital Gains (LTCG) which is applicable for equity. The IRA said there are lots of opportunities for the REITs sector to grow in the country, both from a supply side, where the demand for real estate is bound to keep growing and also on the demand for such instruments as Indians look for newer asset classes. <keyword id="20375329" type="General" weightage="20" keywordseo="ramesh-nair" source="keywords">Ramesh Nair</keyword>, the Chief Executive of Mindspace REIT, said the <keyword id="20069427" type="General" weightage="20" keywordseo="global-capability-centres" source="keywords">Global Capability Centres</keyword> (GCCs) of multinationals alone present a very handsome opportunity for the REITS story in the country. Citing the experience in the US, industry executives said there will be dedicated REITs for specific aspects like warehousing and residential properties. When asked about the lack of demand in the residential space till now -- three Indian REITs are in commercial space while the fourth is in retail -- an industry executive said the yields are very low at 2-3 per cent which prevents REITs' play. Nair said the sector wants to reach out to mutual funds' lobby grouping Amfi to learn and partner with them, given that the REIT's current priority is also to create awareness among the investors.

Real estate investment trust pitch for direct bank lending, classification as equity

Strong demand for <keyword id="17408" type="General" weightage="20" keywordseo="infrastructure" source="Orion">infrastructure</keyword> investment, attractive returns, and favourable government policies have pushed fund mobilization through listed <keyword id="11931834" type="General" weightage="20" keywordseo="reits" source="Orion">REITs</keyword> and <keyword id="6425787" type="General" weightage="20" keywordseo="invits" source="Orion">InvITs</keyword> to Rs 18,658 crore in the April-September period of the current fiscal. This came following a fund collection of Rs 2,596 crore through listed Infrastructure Investment Trusts (InvITs) in the entire 2022-23, although the amount mopped up through listed <keyword id="6354553" type="General" weightage="20" keywordseo="real-estate" source="Orion">Real Estate</keyword> Investment Trusts (REITs) was nil, data with the Securities and Exchange Board of India (<keyword id="35210" type="General" weightage="20" keywordseo="sebi" source="Orion">Sebi</keyword>) showed. Going forward, experts believe that trends seen in REITs and InvITs will continue in the second half of the year too. "The fresh savings will continue similarly as has happened in the last six months, and the investments will continue to be towards InvITs as both the central government and the state governments continue to focus more on infrastructure development," Himanshu Kohli, Co-founder of Client Associates, said. Hence, the trends you have seen in REITs and InvITs will continue in the second half of the year, he said. According to Sebi data, Rs 18,658 crore was collected through these emerging investment vehicles in the April-September period of 2023-24. This comprises Rs 12,753 crore through InvITs and the remaining Rs 5,905 crore via REITs. Karan Shetty, Co-Founder of Claravest, a fractional ownership real estate investment platform, attributed several factors for the massive jump in fundraising through the route to favourable government policies, huge demand for investment in real estate, and the government's focus on urbanisation and infrastructure development. Additionally, other reasons for the surge in fund collection could be regular income provided by REITs and InvITs as these trusts are required to distribute 90 per cent of their income to investors regularly, gives diversification benefit, provides liquidity benefits as the units trade on stock exchanges and increased awareness and investor interest about the instruments, Feroze Azeez, Deputy CEO, Anand Rathi Wealth, said. Moreover, the government and the capital markets regulator Sebi have played an active role in popularising and promoting REITs and InvITs in India. Of the Rs 18,658 crore investment, Rs 12,753 crore was invested through InvITs, and the remaining Rs 5,905 crore via REITs. InvITs have been more popular than REITs in terms of fundraising, due to several factors as InvITs can invest in a wider range of assets than REITs, including roads, highways, bridges, railways, power transmission lines, renewable energy projects, and gas pipelines. Besides, InvITs are exempt from paying income tax at the trust level, which makes them more attractive to investors, Azeez said. "Further, the infrastructure sector in India is expected to grow significantly in the coming years, which is likely to drive the growth of InvITs," he added. REITs and InvITs are relatively new investment instruments in the Indian context but are extremely popular in global markets for passive income investors due to attractive yields and capital appreciation. While a REIT comprises a portfolio of commercial real assets, a major portion of which is already leased out, InvITs consist of a portfolio of infrastructure assets such as highways, and power transmission assets. InvITs and REITs help infrastructure developers monetise their assets and redeploy the capital into upcoming projects. However, these instruments are comparatively new to Indian investors with only four registered REITs and 22 registered InvITs, as of August 8, 2023, Sebi data showed. The value of mutual fund exposure to REITs and InvITs stood at Rs 8,416 crore as of September 30, 2023.

REITs,  InvITs collect Rs 18,658 cr in Apr-Sep on robust infra demand, attractive returns

<ul><li>In recent years, the government's regulatory reforms have attracted increased participation from domestic financial institutions. </li><li>Between 2010 and H1 2023, the sector has seen approximately $12 billion in exits through 267 deals. </li><li><keyword id="6354553" type="General" weightage="20" keywordseo="real-estate" source="Orion">Real estate</keyword>-focused AIFs have become a preferred choice for real estate investments among domestic institutions, UHNWIs, and family offices. </li></ul>The Indian real estate sector, which has been having a positive 2023, is now looking poised for expansion, with the potential to tap into approximately $41 billion in domestic <keyword id="16810461" type="General" weightage="20" keywordseo="institutional-capital" source="Orion">institutional capital</keyword>, as per JLL's report titled 'The rise of domestic capital in Indian real estate'. Over the last decade, the sector has attracted around $57 billion in institutional investments, with a substantial $46 billion of these investments occurring between 2015 and the first half of 2023, accounting for 81% of total investments since 2010. Historically, the Americas were the dominant <keyword id="34499" type="General" weightage="20" keywordseo="private-equity" source="Orion">private equity</keyword> (PE) investors in India, but due to concerns abou a looming recession, their share has significantly decreased from 52% in 2022 to 26% in the first half of 2023. Nevertheless, as <keyword id="6438315" type="General" weightage="20" keywordseo="foreign-institutional-investors" source="Orion">foreign institutional investors</keyword> adopted a more cautious approach, H1 2023 saw an increase in domestic capital, helping to bridge the gap left by the reduction in foreign investments. <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Investment amount ($ million) </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">2015 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">4,765 </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">2016 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">5,624 </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">2017 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">6,757 </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">2018 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">6,418 </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">2019 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">5,431 </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">2020 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">5,034 </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">2021 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">4,011 </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">2022 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">5,151 </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">H1 2023 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">2,939 </td></tr><tr><td style="border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td><td style="border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td colspan="2" style="vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Source: JLL Capital Markets and Venture Intelligence </td></tr></tbody><tbody></tbody></table> <cmsannotation type="cmsannotation" annotationid="Regulatory reforms and govt initiatives drive investments" comment="Subhead" text="Regulatory reforms and govt initiatives drive investments">Regulatory reforms and govt initiatives drive investments</cmsannotation> The introduction of regulatory changes, including the Real Estate Investment Trusts (<keyword id="11931834" type="General" weightage="20" keywordseo="reits" source="Orion">REITs</keyword>) guidelines in 2014, followed by the Housing for All Mission in 2015, the Real Estate Regulation and Development Act in 2016, the Benami Transactions (Prohibition) Amended Act in 2016, the implementation of the Goods and Services Tax (GST), and relaxation in foreign direct investment (FDI) norms, has significantly stimulated institutional investments in the Indian real estate sector since 2015. In recent years, the government's regulatory reforms have attracted increased participation from domestic financial institutions within the real estate industry. Between 2010 and H1 2023, the sector has seen approximately $12 billion in exits through 267 deals. Notably, domestic investors have played a substantial role in these exits, accounting for 73%, in contrast to the 27% facilitated by foreign investors. The report also highlights that buybacks and secondary sales have been the preferred exit routes, representing 51% and 31% respectively over the past 12 years. Furthermore, the latest REITs have witnessed growing involvement from domestic institutional investors, such as mutual funds and insurance companies, reflecting a rising interest in real estate from these entities, who have taken on anchor investor roles. Says Lata Pillai, senior managing director and head, Capital Markets, India, JLL, “Domestic institutions are growing stronger due to sustained capital inflows enabled by the growing economy and a robust regulatory environment. We anticipate that investments from domestic institutions will become an important source of capital in the real estate sector in the years to come.” <cmsannotation type="cmsannotation" annotationid="Alternative investment funds playing a major role" comment="Subhead" text="Alternative investment funds playing a major role">Alternative investment funds playing a major role</cmsannotation> Real estate-focused alternative investment funds (AIFs) have become a preferred choice for real estate investments among domestic institutions, UHNWIs, and family offices. AIF-II category, as of December 31, 2022, had amassed an impressive $16.5 billion, reflecting a remarkable 91% compound annual growth rate (CAGR) since 2013 when it stood at $427 million. These AIFs injected roughly $16 billion into the real estate sector, significantly enhancing liquidity. <cmsannotation type="cmsannotation" annotationid="Insurance and mutual funds’ opportunity" comment="Subhead" text="Insurance and mutual funds’ opportunity">Insurance and mutual funds’ opportunity</cmsannotation> As of March 31, 2023, life insurance companies had deployed approximately ₹10,867 crore, and general insurance companies about ₹1,845 crore in real estate. These investments are just a fraction of the permissible allocation. Regulatory frameworks create opportunities for substantial long-term capital infusion, with insurance companies holding a potential of around ₹1.65 trillion for real estate investments. Mutual funds also have the opportunity to diversify into real estate, encompassing investments in Real Estate Investment Trusts (REITs) and real estate company shares. However, these investments are capped at 10% of the net asset value (NAV) of the fund. <cmsannotation type="cmsannotation" annotationid="Private wealth can be a game changer" comment="Subhead" text="Private wealth can be a game changer">Private wealth can be a game changer</cmsannotation> The population of ultra-high-net-worth individuals (UHNWIs), those with a net worth exceeding $30 million, is projected to surge by around 40% in the coming years, soaring from 13,627 individuals in 2021 to over 19,000 by 2026. This surge in private wealth signifies a burgeoning segment in India, set to make a significant contribution to private domestic capital investments within the real estate sector.

Cementing gains: Indian real estate sector sees strong inflows from domestic capital

<ul><li>The <keyword id="9868360" type="General" weightage="20" keywordseo="office-sector" source="Orion">office sector</keyword> accounted for the largest share of investment inflows at 74%, with the residential sector following at a distant 12% share. </li><li>Despite a weak global economy, institutional investment inflows already amount to approximately 75% of the total inflows seen in 2022. </li><li>Currently, only 11% of the Grade A office stock in the top six cities is listed as <keyword id="11931834" type="General" weightage="20" keywordseo="reits" source="Orion">REITs</keyword>, indicating that there is an untapped potential of an additional 57%. </li></ul>During the first half of 2023, institutional investment in the office sector increased by 2.5 times year-on-year (Y-o-Y), reaching $2.7 billion. This indicates that investors continue to have confidence in the sector's potential for growth and returns. The office sector accounted for the largest share of investment inflows at 74%, with the residential sector following at a distant 12% share. Inflows of institutional investments in the Indian real estate market rose by 43% Y-o-Y to $3.7 billion, according to a report by Colliers, a real estate services firm. Despite a weak global economy, institutional investment inflows already amount to approximately 75% of the total inflows seen in 2022. The strong outlook for the domestic economy supports the positive fundamentals of real estate asset classes, including office and residential properties. Institutional investors are particularly interested in the office sector due to increased opportunities, strong demand, and promising growth prospects over the next 2-3 years. Over the past five years, foreign investments in the office sector have been bolstered by several factors including higher demand for Grade A office space, a robust supply pipeline, improved transparency, and the availability of exit avenues such as Real Estate Investment Trusts (REITs). In the first half of 2023, foreign investments in office assets amounted to $1.9 billion, representing 71% of the total investments in the sector. Global investors continue to view the Indian office sector favorably and have shown a growing interest in high-quality Grade A office properties that generate stable income. While many prominent <keyword id="9448271" type="General" weightage="20" keywordseo="office-projects" source="Orion">office projects</keyword> are already backed by top institutional investors, there is a healthy supply pipeline of over 150 million square feet under development across the six major cities, offering new investment opportunities over the next three years. Investors in this spectrum are forming large Joint Venture (JV) platforms to deploy funds and capitalise on the expanding opportunities in upcoming office projects. Says Piyush Gupta, Managing Director, Capital Markets &amp; Investment Services at Colliers India, "Office sector is witnessing a recalibration globally, and hence the decision to invest is also taking longer. Further, interest rates and inflationary pressures are also temporarily keeping the investors in wait-and-watch mode as the investors reprice the global macro risks. The appetite to invest remains strong with newer funds looking to enter the Indian market." Investments inflows ($ mn) <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Asset Class </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q2 2022 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q2 2023 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q2 2023 vs Q2 2022 (% Change) </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">H1 2022 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">H1 2023 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">H1 2023 vs H1 2022 (% Change) </td></tr><tr><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Office </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">464.9 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">1,811.6 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">290% </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">1,108.5 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">2,719.2 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">145% </td></tr><tr><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Residential </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">72.9 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">72.3 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">-1% </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">89.4 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">433.4 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">385% </td></tr><tr><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Alternate assets* </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">359.0 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">- </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">-100% </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">398.8 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">158.2 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">-60% </td></tr><tr><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Industrial &amp; Warehousing </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">- </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">133.9 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">- </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">179.8 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">350.2 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">95% </td></tr><tr><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Mixed use </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">230.7 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">- </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">-100% </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">308.0 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">15.1 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">-95% </td></tr><tr><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Retail </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">234.8 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">- </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">-100% </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">491.8 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">0.0 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">-100% </td></tr><tr><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">1,362.3 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">2,017.8 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">48% </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">2,576.3 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">3,676.1 </td><td style="border-left:solid #bfbfbf 0.75pt;border-right:solid #bfbfbf 0.75pt;border-bottom:solid #bfbfbf 0.75pt;border-top:solid #bfbfbf 0.75pt;vertical-align:top;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">43% </td></tr></tbody></table> *Note: Alternate assets include data centers, life sciences, senior housing, holiday homes, student housing, etc. Source: Colliers <cmsannotation type="cmsannotation" annotationid="REITS on a high" comment="subhead" text="REITS on a high">REITS on a high</cmsannotation> The introduction of Real Estate Investment Trusts (REITs) has brought a sense of corporatisation to the Indian office market, and favorable regulatory reforms have attracted increased investments to the sector. Currently, only 11% of the Grade A office stock in the top six cities is listed as REITs, indicating that there is an untapped potential of an additional 57%. With the current rate of investments in the sector, there is an opportunity to unlock this potential and move closer to our counterparts in the Asia-Pacific (APAC) region. The implementation of REITs and the realisation of their full potential can contribute to the further growth and development of the Indian office market.

Institutional investment in the office real estate sector increases 2.5 times to reach $2.7 billion

<ul><li>The finance bill has brought the debt repayment component of distribution income by <keyword id="11931834" type="General" weightage="20" keywordseo="reits" source="Orion">REITs</keyword> and <keyword id="6425787" type="General" weightage="20" keywordseo="InvITs" source="Orion">InvITs</keyword> under tax.</li><li>However, only a small portion of the amount will attract tax as the taxed amount will be calculated after deducting the cost of acquisition of units at the time of sale of units.</li><li>With this, analysts are positive REITs and InvITs and consider it as an attractive investment product.</li></ul>One of the major amendments in the finance bill softened the tax impact on unitholders of <keyword id="6425721" type="General" weightage="20" keywordseo="Real-Estate-Investment-Trusts" source="Orion">Real Estate Investment Trusts</keyword> (REITs), and Infrastructure Investment Trust (InvITs). REIT is an investment product that lets you invest in real estate without buying an actual property. REITs are companies that own commercial real estate such as office buildings, retail spaces, apartments and hotels and tend to pay high dividends. InvITs are the same, but invest in infrastructure assets instead. The finance bill has brought the debt repayment component of distribution income by REIT and InvIT under tax. Now only a portion of the amount will attract tax as the taxed amount will be calculated after deducting the cost of acquisition of units at the time of sale of units. “The amendment to the Finance Bill has led to moderation in tax incidence for repayment of capital, as the same would now be reduced from the cost of acquisition to the extent of issued capital. The amended stance substantially reduces the tax incidence, as a capital gains tax at the point of sale rather than marginal tax rate on receipt of payment,” said a report by Kotak Institutional Equities. With this, analysts are positive REITs and InvITs and consider it as an attractive investment product. Prior to the union budget FY24, the unit holder was not taxed on dividend distribution and return on capital, only the interest income was taxed at the marginal tax rate, said analysts at JM Financial. “Finance Bill 2023 has proposed that the tax will be levied on the distributed proceeds net of issue price (capital) in the hands of the REIT/InvIT unit holders, making the capital distribution tax free for an extended period of time, thus improving post-tax yield. This new amendment increases the relative attractiveness of REITs / InvITs as the major taxation overhang is removed. However, the proceeds will be taxed at slab rates and not as capital gains (10% on long-term gains and 15% on short-term gains),” said a report by JM Financial. A report by Kotak Institutional Equities says they are positive on the sector as “leasing momentum continues to be strong and current REIT prices imply attractive FY2024E yields of 7-8%. We remain positive on the sector.” The proposed amendment is largely in line with the representations made by the industry to the government. Commercial real estate in top Indian cities in 3QFY23 saw the second-highest quarterly gross absorption in the past 10 years at 20 million square feet. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/fashinza-raises-30-million-from-mars-growth-capital-and-liquidity-group/articleshow/99057241.cms">Fashinza raises $30 million from Mars Growth Capital and Liquidity Group</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/adani-group-stocks-tumble-eroding-53291-crore-market-capitalisation-today/articleshow/99057169.cms">Adani group stocks tumble, eroding ₹53,291 crore market capitalisation: All ten stocks in red</a>

REITs and InvITs become attractive after major taxation overhang removed

<ul><li>Among secondary business districts (SBDs), Hyderabad has the largest portion of REIT-worthy stock, followed by Bengaluru. </li><li>Currently, the three listed office REITs collectively own about 74.4 million sq ft of <keyword id="181150" type="General" weightage="20" keywordseo="office-space" source="Orion">office space</keyword> – accounting for about 11% of the total Grade A office stock available. </li><li>The market capitalisation of listed REITs in India is less than 10% compared with countries like the USA and Singapore. </li></ul>About two-thirds of the Grade A office space suitable for real estate investment trusts (REITs) is located in the secondary business districts (SBDs) of the top six cities in India. Among these SBDs, Hyderabad has the largest portion of REIT-worthy stock – accounting for 28%, followed by Bengaluru at 24%, according to analysis by real estate management firm Colliers. Moreover, over 60% of the Grade A office space within SBDs is considered suitable for <keyword id="168019" type="General" weightage="20" keywordseo="reit" source="Orion">REIT</keyword> investment. In contrast, about half of the Grade A office space in the peripheral business districts (PBDs) across the top six cities is deemed REIT-worthy. The central business districts (CBDs) have a relatively lower share of REIT-worthy stock – standing at 10% – mainly due to limited new supply and the presence of older buildings. Currently, the three listed office REITs collectively own about 74.4 million sq ft of office space – which accounts for approximately 11% of the total Grade A office stock available. Embassy Office Parks REIT, Mindspace Business Parks REIT, and Brookfield India Real Estate Trust are listed on the stock exchange. The office sector, particularly in the top six cities, has demonstrated resilience with high <keyword id="528062" type="General" weightage="20" keywordseo="occupancy-rates" source="Orion">occupancy rates</keyword>, despite external factors impacting demand. <cmsannotation type="cmsannotation" annotationid="Huge potential for growth" comment="subhead" text="Huge potential for growth">Huge potential for growth</cmsannotation> In Q1 2023, office vacancy levels remained steady at 16.4%, indicating a robust commercial office market. The outlook for the office sector is positive, driven by technology, and flexible workspace trends – with the market projected to recover further in the latter part of the year. Says Piyush Gupta, managing director, capital markets and investment services, Colliers India, “REITs in India are still at their early stages compared to other regional markets. Strikingly, the market capitalisation of Indian REITs is &lt;10% compared to the USA, Singapore, and other countries in the APAC (Asia-Pacific).” “Considering the size of the Indian office market, there exists a huge potential for more number of REITs and expansion of current REITs,” he added. Currently, the REIT penetration rate in India stands at 11%, leaving ample room for expansion up to 68%, aligning with other APAC countries like Singapore and Japan – where over 50% of their office portfolios are held under REITs.

Secondary business districts, and not CBDs, have more Grade A office space worthy of REITs

<keyword id="6984075" type="General" weightage="20" keywordseo="NSE-Indices" source="Orion">NSE Indices</keyword> Ltd, an arm of the <keyword id="53581" type="General" weightage="80" keywordseo="national-stock-exchange" source="Orion">National Stock Exchange</keyword> (<keyword id="6354646" type="General" weightage="20" keywordseo="NSE" source="Orion">NSE</keyword>), on Tuesday, launched the country's first-ever Real Estate Investment Trusts and Infrastructure Investment Trusts index - Nifty <keyword id="11931834" type="General" weightage="20" keywordseo="REITs" source="Orion">REITs</keyword> and <keyword id="17097508" type="General" weightage="20" keywordseo="InvITs-index" source="Orion">InvITs Index</keyword>. The index aims to track the performance of REITs and InvITs that are publicly listed and traded on the NSE, the exchange said in a statement. A real estate investment trust (REIT) or an infrastructure investment trust (InvIT) is an investment vehicle that owns revenue-generating real estate or infrastructure assets. REITs invest in real estate projects, whereas InvITs invest in infrastructure projects with a long gestation period. Through these trusts, investors get exposure to diversified regular income-generating real estate and infrastructure assets. "REITs and InvITs are recognised as strong alternative financial instruments to raise funds against the cash generating infrastructure and real estate projects. For investors, these instruments provide exposure to real estate or infrastructure assets and offer diversification of risk from regular asset classes like equity, debt and gold and generate regular income," NSE Indices CEO Mukesh Agarwal said. The weights of securities within the index will be based on their free-float market capitalisation, subject to a security cap of 33 per cent each, and the aggregate weight of the top three securities is capped at 72 per cent. The Nifty REITs and InvITs index has a base value of 1,000 and the index will be reviewed and rebalanced on a quarterly basis. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/sports/news/bcci-to-spend-rs-500-crore-to-upgrade-five-major-stadiums-ahead-of-world-cup/articleshow/99406322.cms">BCCI to spend Rs 500 crore to upgrade five major stadiums ahead of World Cup</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/space/news/a-giant-asteroid-the-size-of-qutub-minar-to-pass-dangerously-close-to-earth-at-30-times-the-speed-of-sound/articleshow/99406843.cms">Just Look Up: Giant asteroid the size of Qutub Minar to pass dangerously close to Earth</a>

NSE Indices launches India's first-ever REITs and InvITs index

Capital markets regulator <keyword id="35210" type="General" weightage="100" keywordseo="sebi" source="Orion">Sebi</keyword> on Thursday extended the timeline till March 15, for submission of public comments on a proposal pertaining to higher responsibility for sponsors of investment vehicles - <keyword id="11931834" type="General" weightage="20" keywordseo="reits" source="Orion">REITs</keyword> and InvITs. The regulator had put in place a consultation paper on holding of sponsors in <keyword id="162545" type="General" weightage="80" keywordseo="real-estate-investment-trust" source="Orion">Real Estate Investment Trust</keyword> (REITs) and <keyword id="2584560" type="General" weightage="80" keywordseo="infrastructure-investment-trust" source="Orion">Infrastructure Investment Trust</keyword> (InvITs) on February 23 and sought public comments on the same by March 8. "It has been decided to extend the timeline for submission of comments to March 15, 2023," the <keyword id="6355630" type="General" weightage="80" keywordseo="securities-and-exchange-board-of-india" source="Orion">Securities and Exchange Board of India</keyword> (Sebi) said in a public notice. In its consultation paper, the regulator proposed changes to rules governing REITs and InvITs whereby sponsors will be required to own a certain percentage of units in these investment vehicles. The changes were proposed keeping in mind the interest of unit holders and the structural vulnerabilities associated with the absence of a sponsor for REITs and InvITs. The watchdog suggested that the sponsors of REITs/InvITs should hold 15 per cent of the capital for a period of three years from the date of listing as there is no mandatory unit holding requirement after three years. It was also proposed to mandate sponsors to hold 5 per cent of the unit capital after 3-5 years, 3 per cent from 5-10 years, 2 per cent from 10-20 years and 1 per cent after 20 years. As per Sebi, the REIT/InvIT industry is in a nascent stage and continuously evolving, there is a need to have at least one sponsor throughout the life of the investment managers. REITs and InvITs are relatively new investment instruments in the Indian context but are extremely popular in global markets. While a REIT comprises a portfolio of commercial real assets, a major portion of which is already leased out, InvITs comprise a portfolio of infrastructure assets, such as highways and power transmission assets. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/indias-gross-savings-and-investments-edge-higher-in-fy22-despite-inflation-says-sbi-research-report/articleshow/98444014.cms">India’s gross savings and investments edge higher in FY22 despite inflation, says SBI Research report</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/nclt-approves-suraksha-groups-bid-for-jaypee-infratech/articleshow/98476892.cms">NCLT approves Suraksha group's bid for Jaypee Infratech</a>

SEBI extends deadline till Mar 15 to submit public comments on proposal on REITs, InvITs sponsors

New Delhi, Nov 17 (PTI) Global investment firm Blackstone-sponsored Nexus Select Trust filed the draft paper with market regulator SEBI on Thursday to launch India's first public issue of retail REIT to raise around USD 500 million, sources said. Nexus Select Trust has a portfolio of 17 operational shopping malls across 14 major cities, covering about 10 million square feet area valued around USD 3 billion. As per the sources, Nexus Select Trust has filed the Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) and is looking to hit the capital market with India's first retail REIT (Real Estate Investment Trust) public issue in the first half of 2023 calendar year. The size of the initial public offer (IPO) of Nexus Select Trust REIT will be around USD 500 million, they added. This will be the third REIT sponsored by the Blackstone. It had earlier launched India's first REIT -- Embassy Office Parks REIT-- and then Mindspace Business Parks REIT. The REIT, a popular instrument globally, was introduced in India a few years ago to attract investment in the real estate sector by monetising rent-yielding assets. It helps unlock the massive value of real estate assets and enable participation of retail investors. At present, there are three listed REITs -- Embassy Office Parks REIT, Mindspace Business Parks REIT and Brookfield India Real Estate Trust -- on Indian stock exchanges but all these are of leased office assets. Nexus Select Trust will be the first REIT with rent-yielding retail real estate assets. In its portfolio of 10 million square feet of retail real estate, Nexus Select Trust has also included Select Citywalk mall in south Delhi. There are around 3,000 stores in its shopping malls while the number of brands are approximately 1,000. The sources said Blackstone is very bullish on the growth story of India's retail sector, which have bounced back sharply post the second wave of the Covid pandemic. "The fundamental of India's retail business is very strong. People are spending money and watching movies," a source said. Unlike office segment, there are not many players in shopping malls business and also the supply of Grade A malls is also limited, the sources said. On operational front, the occupancy level in the malls currently stands at 94 per cent with annual footfall of over 130 million, they said. The sales in its malls during the April-June quarter have been 24 per cent more than the pre-Covid level. Nexus Select Trust has done leasing of around 3.5 million square feet over the last three years and three months. Its senior management team consisting of nine CXOs (with 20+ years average experience) led by Dalip Sehgal (former executive director of Unilever India) as CEO is supported by over 500 employees. The board of directors is highly diversified and experienced. The key board members are Michael Holland (ex-CEO of the Embassy REIT), Arjun Sharma (Chairman and Director of the Select Group), Jayesh Merchant (ex-CFO Asian Paints), Sadashiv Rao (Former Director of IDFC) and Tuhin Parikh (Head of BX India Real Estate). Blackstone has a real estate portfolio of 85 assets totalling 150 million square feet across office, retail and logistics segments. In office, Blackstone is collectively one of India's largest office landlords (41 assets totalling 101 million square feet), while in logistics and industrial space, the Blackstone is one of India's largest warehousing landlords (21 assets totalling 38 million square feet). Blackstone has recently set up a fully-owned platform 'Lumina' to invest in data centres across Asia, with initial focus on India. India's first REIT of Rs 4,750 crore issue size was listed in April 2019 by Embassy Office Parks, sponsored by Blackstone and realty firm Embassy Group. In August 2020, K Raheja and Blackstone-sponsored Mindspace Business Parks launched the country's second REIT to raise Rs 4,500 crore. Global investment firm Brookfield has listed the country's third REIT after raising Rs 3,800 crore through an IPO.

You Searched For "reit" and got 14 results

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Institutional investment in the office real estate sector increases 2.5 times to reach $2.7 billion

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REITs and InvITs become attractive after major taxation overhang removed

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Secondary business districts, and not CBDs, have more Grade A office space worthy of REITs

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NSE Indices launches India's first-ever REITs and InvITs index

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SEBI extends deadline till Mar 15 to submit public comments on proposal on REITs, InvITs sponsors

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Blackstone-backed Nexus files for $500 million IPO

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