The country’s first Real Estate Investment Trust (REIT) — Embassy Office Parks REIT — made its debut on the bourses on Monday, gaining nearly 5% over its issue price. On the BSE, the REIT units opened flat at its issue price of ₹300, before touching an intra-day high of ₹324.50. The units settled the day at ₹314.10, a gain of 4.70% over its issue price. On the NSE, the REIT units closed at ₹314 with over 29 lakh units being traded. Market participants believe that the listing of the first REIT of the country would lead to other real estate entities especially those with a portfolio of rent-yielding commercial properties look at the capital market that, in turn, would provide a new avenue for investors as well.
Sharad Mittal of Motilal Oswal Real Estate Fund believes that the listing of REIT has opened a new phase in the Indian real estate wherein retail investors can own financial assets in real estate.
“While the issue was primarily subscribed by institutional investors, we believe that this will attract retail investments over a period of time. Apart from Embassy and Blackstone, several large developers and investors have been building REITable asset portfolios over the last few years. Following the success of the Embassy REIT listing, we may witness at least 1 or 2 more listings over the next year or so,” said Mr. Mittal.
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At Monday’s closing price, the market capitalisation of the REIT is pegged at ₹24,238 crore. The ₹4,750 crore initial public offer of the REIT, which closed on March 20, was subscribed nearly 2.58 times.