The funds will bring structured equity to real estate
Over the past two decades, the global commercial real estate sector has seen a dramatic shift from private sector to public markets. The Indian real estate industry’s growing demand for additional sources of funds and the success story of global real estate investment trusts (Reits) is compelling enough to encourage the implementation of a similar regime in India with requisite adjustments. Typically, Reits invest in completed, revenue generating commercial properties and distribute a major portion of the earnings among investors. They have proven to be an attractive investment option for retail investors as well as for long-term pools of capital such as pension funds and insurance companies who prefer to have a regular income stream. Historically, global Reits have been able to generate significant market traction. The US Reit industry’s market capital, for example, has grown at an average annual rate of nearly 23% in the past 20 years.