(Bloomberg) -- Colliers International Group Inc. expects more real estate investment trusts to be formed in India's nascent market following the robust performance of their listed peers in the country.
“We expect a lot more REITs to happen over the next one year given that all REITs have done well in spite of uncertainties,” Ramesh Nair, chief executive officer for the property consultancy firm's Indian operations, said in an interview with Bloomberg Television. “Going forward, there would also be industrial and retail REITs, while office REITs will continue.”
Three REITs, which mainly hold commercial office assets, have listed on India's stock exchanges so far. Embassy Office Parks REIT, Mindspace Business Parks and Brookfield India Real Estate Trust have risen more than 15% over the past year, collecting more than 95% of rents from tenants even as a lethal pandemic wave gripped the country last year.
Still, recovery in the leasing of office space has been slow. Overall space leased out for offices across the top six Indian cities was around 33 million square feet, 10% higher compared with 2020, but nearly 30% below pre-pandemic levels in 2019. Nair expects the Indian office market to take two years to recover completely.
India's industrial and warehousing property market has staged a quicker recovery, with the space leased out reaching pre-covid levels, Nair said. Demand will continue to rise as India has one of the fastest growing e-commerce and third-party logistics market.
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