India’s Real Estate Sector Poised for Growth as REITs and Infrastructure Investments Gain Momentum

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Real Estate Investment Trusts (REITs)

India’s real estate sector is expected to experience significant growth in the coming years, fueled by the rise of Real Estate Investment Trusts (REITs) and substantial investments in infrastructure development. The introduction of REITs in India has opened up opportunities for retail investors to participate in the real estate market and unlock the value of rent-yielding assets. Alongside this, infrastructure projects such as roads, airports, ports, railways, and logistics are set to propel India’s growth story forward.

CBRE India’s head, Anshuman Magazine, highlights the growing popularity of REITs in India. He expects the listing of at least four REITs on the Indian stock exchanges by the end of 2024 or early 2025, depending on market performance. Currently, three office-backed REITs and one retail-asset-backed REIT are listed, attracting institutional investors and providing retail investors with an avenue to own real estate assets. The expansion of REITs encourages more institutional investments, transforming the real estate landscape and allowing financial institutions to own real estate.

Simultaneously, substantial investments in infrastructure development are set to reshape India’s physical landscape. Major projects encompassing highways, airports, ports, railways, maintenance, repair, and operations (MROs), and logistics are expected to create a robust foundation for economic growth. These infrastructure developments are vital for improving connectivity, facilitating trade, and attracting investments to different regions of the country. The implementation of projects is driven by increasing demand, with various facilities, motels, office buildings, retail, and food and beverage outlets springing up around railway stations.

India’s expanding role as a global player is further reinforced by its skilled workforce and contributions to Environmental, Social, and Governance (ESG) initiatives. Multinational corporations (MNCs) setting up offices in India are actively supporting the country’s ESG and climate plans by occupying only platinum-rated or ESG-compliant office spaces. Additionally, India’s skilled manpower is recognized globally, with the country transitioning from being a back office for international corporations to a hub for software development, product engineering, design, and processing.

India’s real estate sector is poised for significant growth, propelled by the increasing presence of REITs and substantial investments in infrastructure development. The emergence of REITs enables retail investors to participate in the real estate market, while institutional investors benefit from attractive returns. Concurrently, infrastructure projects are reshaping India’s physical landscape, enhancing connectivity, and supporting economic growth. With a skilled workforce and expanding global presence, India is well-positioned to attract investments and contribute to the world economy. As the country continues to focus on education and skill development, challenges are being addressed to ensure sustained prosperity and growth for India’s real estate sector and beyond.

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