By 2019, a quarter of India's top-rated office space of 464 million sq ft is expected to get listed with an estimated valuation of around $18 billion (Rs 1.2 lakh crore). If this happens then based on the percentage of listed Grade-A office space, India’s REIT market is expected to surpass all other established Asia-Pacific markets including Australia, Singapore, Hong Kong, Malaysia and Japan, according to real estate consultancy JLL.
"While the industry expects anywhere between 25 per cent and 100 per cent of the Grade-A office space to get listed under REITs, we believe that expecting anything above 25 per cent is more optimistic than realistic. Even 25 per cent of the office space listing under REITs is higher than what is seen across Asia-Pacific (APAC)," Shobhit Agarwal, Managing Director-capital markets at JLL India, has reportedly revealed.Singapore's REIT market comes closest to India's lowest expected percentage at 19 per cent, followed by Australia (13 per cent), Hong Kong (11 per cent), Malaysia (8 per cent), New Zealand (4 per cent) and Japan (3 per cent). However, most of these markets are already mature and by value are much bigger than India's potential REITs market.Commercial developers would be able to get funding through equity REITs. Also, recent relaxations in investment rules allow REITs to invest in under-construction assets as well.With REITS, developers and investors will receive a substantial amount of liquidity. This will be through the creation of a secondary market for commercial rent-yielding properties. It is also know that retail investors will have a new avenue for investment, with which, they could invest directly in property with the assurance that the markets are well regulated, transparent and promote full disclosure by the REIT.