Brookfield is looking to set up a real estate investment trust in India.

Q: Brookfield plans to set up $500 million real estate trust in India.

Ramesk Polekar, Mumbai

20th January 2015

Real estate News in Mumbai

real estate

reits

brookfield

canadian asset management firm brookfield

company expansion

jones lang lasalle india

Follow Discussion

Also see discussions for

Mumbai Real estate News Real estate News in Mumbai

Replies (10)

But i think we should be optimistic towards any new initiatives......
India has potential. The top 7 cities of India together have more than 400 million square feet of operational office space, This is expected to grow by approximately 25 million to 30 million sq-ft. annually. Of this office stock, more than 150 million sq- ft will be ready for REIT listing,

Anusua Pillai, Bangalore

11th September 2015

Comment

Hope so......we are looking forward to seeing REITs launched in India in the coming year. Industry wide, there will be limits on what assets can be transferred to REITs. A significant part of that needs to be discounted for quality. We don't see the opportunity for significant non-office REITs, particularly residential, as the rental market is quite informal and break into pieces.

Sanchita Chanda, Ahmedabad

11th September 2015

Hi all!!!
As per the recent modifications by the government include removing long-term capital gains tax on the transfer of REIT units by sponsors and minimum alternative tax (MAT) when it transfers shares to the REIT and when it sells units of REITs. many prominent builders have applauded the moves. It mentioned in May that it could set up its first REIT by March 31, 2016, the end of its fiscal year.

Sanchita Chanda, Ahmedabad

11th September 2015

Comment

Well Sanchita.......
I don't think REIT will set up so soon in India. Still, some barriers remain. One is dividend distribution taxes (DDT) and stamp duty on the transfer of properties. The lack of clarity on DDT has acted as a discouragement for the real estate players and the private equity players to launch REITs in the country,

Arun Bhat, Bhiwadi

11th September 2015

Bilkul sahi kaha Arun ji......
The current tax system for REITs in India leads to multiple levels of taxation, as a result of that contrarily affecting the yield to investors and making REITs unattractive for investment. For REITs to become mainstream vehicles for large nos of investors, it is essential to get the tax regime for REITs in India at face value with the international tax system.

Sanchita Chanda, Ahmedabad

11th September 2015

Hi Everybody,
While institutional and retail investors of both India and China have had a sampling of Asian real estate through REITs, in a sense they still have been shut out of the continents most significant economies. As each country has taken steps to open up its market to outside capital that could change in the coming years.

Mritunjoy Deb,

11th September 2015

Comment

Yes, at this point, both the countries have potential. India has made recent key policy changes to allow REITs, which are expected to first hit the market next year. It is just a start, by looking at the numbers, both countries offer huge potential in part due to their vast populations. In China, Penghua-Qianhai-Vanke "REIT" listed on the Shenzhen Exchange in July, 2015.

david.m,

11th September 2015

@David!!!!!
Remember that both of these countries have witnessed growth in gross domestic product (GDP) much greater than their developed counterparts. Real GDP in India is predicted to grow by 7.6% in 2016, up from a pace of 6.9% in 2015, according to the Organization for Economic Cooperation and Development.

Mritunjoy Deb,

11th September 2015

The growth rates and the need for outside capital mean China and India could eventually offer investors fetching options such as the REITs popular in Japan, Australia, and Singapore.

We see development of REIT markets in these countries adding to the depth of the overall REIT market in the region and attracting significant investment into Asia.

david.m,

11th September 2015

The finance ministry is likely to set out rules that would govern the trusts and clarify tax principle. If the government principles rules around setting up, operating and getting REITs listed, many funds including some domestic ones could raise capital through this route.

Lalit Verma, Mumbai

22nd January 2015

Comment

REITs are a popular real-estate investment route in dev eloped markets like the US, India gave its in-principle approval to the instrument only in 2014. Investors are now waiting for the budget where the government is expected to give clarity around REITs.

Anuj Gupta, Mumbai

21st January 2015

Comment

Yes Anuj,
Earlier, Brookfield had bought 100% shares in 4 SEZ and 60% in 2 other assets owned by Unitech and Unitech Corporate Parks in June last year for around Rs 3500 crore. This was the biggest real estate deal in 2014.

Jerome Fernandez, Mumbai

20th January 2015

Comment

Do you know that REITs typically own commercial or retail real estate properties. The rent on these properties is treated as income, and retail investors can invest in the companies when they get listed.

Anuj Gupta, Mumbai

20th January 2015

Comment

Yes Anuj,
According to media reports, Blackstone is looking at raising funds by listing its properties in India through REIT route. Industry trackers say there are at least 2 other players who too could set up and list REITs.

Jerome Fernandez, Mumbai

20th January 2015

Comment

Theoretically, Brookfield can include all the properties on the stock market after registering them as REIT. Yet they are concerned whether the Indian capital market has a capacity to absorb these rental assets. Brookfield is unlikely to bring all the properties that it bought last year from Unitech under the REIT.

Anuj Gupta, Mumbai

20th January 2015

Comment

Right Anuj!!!!
Embassy Office Parks, a joint venture between Embassy Group and Blackstone, holds 22 million sq- ft of space in 3 cities, including Bangalore. There is no shortage of commercial office stock for REIT programs. There remain some small details which remain to be ironed out to make the overall structure tax efficient for investors and owners. We are looking forward to seeing REITs launched in India in the coming year

Anup Goyal, Noida

11th September 2015

Yes Ramesk,
But they are waiting once the country finalised rules governing these companies that typically provide high dividend yield along with capital appreciation to investors. The REIT that Brookfield is considering could be valued at about $500 million. Brookfield is take a look at to just bring selective properties under one umbrella and get it listed first (as REIT). The REIT would be set up and listed on one of the stock exchanges.

Jerome Fernandez, Mumbai

20th January 2015

Comment