Reits, Invits are emerging asset class in India

The Indian real estate investment trust market has attained significant maturity since the launch of the Embassy Reit in April 2019. The success of Reits has created even stronger interest from global equity/sovereign/pension funds to invest in development assets as exit mechanism is now established. It will also make Reits in India more attractive to large foreign investors and improve investors’ confidence in the office sector. Investors can earn income through rentals received from properties owned by Reits which could be in the form of a) dividend income, b) interest income, c) redemption of capital and/or capital gains via sale of Reit units in the secondary market. • Listed Reits in India provide an annualized distribution yield return of 6-7% • Reits are diversified and assets are spread across major regions such as Bengaluru, Mumbai, Hyderabad, NCR, Pune, etc • Reits can only invest in rent-yielding properties and more than 80% of the investment has to be in completed assets • At least 90% of rentals received from invested properties have to be distributed to the unit holders The underlying office market fundamentals are strong.