The REIT time

August 18, 2014 admin

Total Asian REIT market capitalization reached more than $166.3 billion in second quarter 2014, according to the latest edition of The Asian REIT Report. This figure comprises data from the now 117 REITs covered by the report on the REIT markets of Japan, Singapore, Malaysia, Hong Kong, South Korea and Taiwan.

The second quarter 2014 $166.3 billion market cap figure tops the $148.6 billion REIT market cap from the fourth quarter 2013 version of the report, which I discussed this past February in a blog post: “Are Asian REITs in your future?

In that post, I mentioned red tape had been holding back the passage of REIT regulations in India. But that’s no longer the case. In a journey six years in the making, the Securities and Exchange Board of India approved regulations on Aug. 10 that will allow for the public listing of REITs and infrastructure investment trusts. (Although Indian officials penned draft REIT regulations back in 2008, the plans to open up this investment space in the country were put on hold when investor interest in India waned as a result of the global financial crisis.)

Firms have already started gearing up for this big announcement: back in June, Reuters reported that The Blackstone Group, with its local partner Embassy Group, plans to set up India’s first REIT with an office portfolio totaling 20 million square feet in the country.

“We wish to increase the portfolio to 30 million square feet by looking at assets in the top five metros,” Michael Holland, CEO of Embassy Office Parks, said at an event in July, reports The Economic Times.

The opening up of a REIT space in India should breathe new life into Prime Minster Narendra Modi’s promises to lift the economy, which The New York Times suggests have been slow to come to fruition.

For institutional real estate investors, the passing of these REIT regulations in India means the country is now one step closer to allowing their pension fund and related institutions to invest in alternatives such as real estate, notes Geoffrey Dohrmann, president and CEO of Institutional Real Estate, Inc.

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Jennifer-Molloy91x119Jennifer Molloy is editor of The Institutional Real Estate Letter – Asia Pacific.

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