NEW DELHI: With a growing number of developers/institutional investors looking to launch their own Real Estate Investment Trust (REIT) listings in the medium term, evolution of the REITs is likely in 2021, according to a recent report by CBRE.
According to the report, new office-based REITs are expected to be launched in the coming 12-24 months. REITs will have better access to low-cost capital from debt/equity markets in 2021 and a higher liquidity will enable increased capital deployment, it said.
Overall office leasing volume is also expected to witness an uptick in 2021. Post covid-19, India is expected to retain its position as a preferred global outsourcing destination on the back of low-cost knowledge talent, the report added.
Companies will look for portfolio optimization via the right mix of traditional, flexible spaces and any relevant remote working strategy. Hotelisation of office space via amenities and services through ‘phygital’ experiences is also expected.
In the residential sector, mid-end and affordable segments will continue to drive sales in 2021. According to the report, developer incentives and an enabling mortgage regime to boost the growth momentum of the residential sector.
Reconfiguration of residential spaces is likely and increased demand is expected for digitally enabled homes and larger unit sizes to accommodate home offices, it said. The report also added that to mitigate execution risks, developer consolidation and a higher number of joint ventures or joint developments are likely to happen going forward.
According to the CBRE report, debt will remain the key source of funding across most sectors. Last-mile funding opportunities is being evaluated by private equity (PE) funds, primarily for residential real estate developers, it added.
However, overall capital flows are expected to witness an uptick as compared to 2020 as investment activity is expected to pick pace as investors evaluate opportunistic deals going forward.
https://realty.economictimes.indiatimes.com/news/industry/reits-to-have-better-access-to-low-cost-capital-from-equity-markets-report/81192405
