Mumbai: Dubai-based Equitativa Group, an independent Real Estate Investment Trust manager, is looking to tap the Indian market to launch REITs in sectors such as education, commercial real estate and logistics, said a senior executive of the group.
REITs are entities that invest in real estate such as leased office and retail, allowing developers to raise funds by selling completed, rent-yielding buildings to investors.
Equitativa currently manages two REITs in Dubai—Emirates REIT and Residential REIT.
“We created the first ever REIT in the Middle East called Emirates REITs, which is listed. We found huge support for REITs in Dubai and are now looking at other markets where we can replicate it. What we found is that there was a gap in the market for independent asset managers, people who are not linked to any of the other people in the real estate chain," said Abdul Wahab Al-Halabi, group chief investment officer at Equitativa Group.
Emirates REIT is focused on office space and education, with a 60-40 split, while the other REIT comprises pure residential assets.
“Emirates REIT is valued at about a $1 billion at the moment and Residential REIT is running at about $400 million," said Al-Halabi.
Equitativa feels the Indian market presents the right opportunity for REITs, given that economy is doing well and the regulations around the asset class are conducive.
“In India, the laws are already written and the regulators have been quite proactive in terms of amending and tweaking them for the local market. In India, we see our niche to come in as an independent asset managers because there are a very few of us around. It is one of the most attractive markets, a booming economy, generally on an upswing, institutionalizing very quickly," said Al-Halabi.
While the group has also been looking at expanding into other emerging economies such as Morocco, Egypt in North Africa and sub-Saharan Africa, at this stage India is the primary focus, he added.
The group has been exploring opportunities across various sectors in India for the last nine months. Education, however, is at the top of the list for the REIT manager.
“We are looking at various sectors. Sectors that attract us are social infrastructure type sectors such as education (schools) and healthcare are particularly attractive. In India, we will probably the kickstart with education. We have had a lot of interest from school owners, because they are the most constrained right now, they would like to grow and they want a mechanism to grow," said Al-Halabi.
He added that Equitativa is also looking at other sectors such as logistics (warehousing assets) and will look at commercial real estate later.
Equitativa will primarily be looking at assets in the top 12 to 15 cities in the country.