Sector Attracting Good Traction, Says Colliers

REIT in Retail is timely to unlock potential real estate value, as the sector is bouncing back, Vimal Nadar, Head of Research at Colliers India, said

MUMBAI, May 20 (The CONNECT) – India’s first retail REIT, Nexus Select Real Estate Trust listed at 3% premium on the bourses yesterday. The Trust made its debut at Rs 103 on NSE and Rs 102.27 on the BSE.

Nexus Select Trust is India’s leading consumption centre platform with 17 Grade-A best-in-class Urban Consumption Centres spread across 14 cities, according to HDFC Securities

The company owns 17 Grade A urban consumption centres with a total Leasable Area of 9.8 million sq ft, two complementary hotel assets (354 keys), and three office assets of 1.3 msf as on December 31, 2022.

The company has curated a healthy mix of tenants across sectors such as apparel and accessories, hypermarket, entertainment, and food and beverages (F&B). Nexus is also working across 50+ ESG initiatives to create a positive impact on people and the environment.

Nexus Select Trust serves across 14 cities in India including Delhi, Navi Mumbai, Bengaluru, Pune, Hyderabad, and Chennai, which constituted 30% of India’s total discretionary retail spending in FY20.

The Nexus Select Trust will not receive any proceeds from the offer for sale and the proceeds received will not form part of the net proceeds.

Sankey Prasad, Chairman & Managing Director, India at Colliers said this is India’s first Retail REIT and it aims at expanding the investible cosmos for investors. Retail sector has evinced greater investor interest as it continues to emerge stronger from the lows of pandemic. Institutional investments in retail grew over six-fold on an annual basis, with about USD500 million of investment inflows during 2022. REIT in the retail sector will not only institutionalize the segment but allow individual investors to own rent-yielding retail assets, thus allowing bigger & smaller investors to reap benefits of its innate growth potential. Driven by favourable demographics & rising consumption backed by quality supply from established developers, the sector is likely to see more investment traction in the next few years, Prasad said.

REIT has now established itself as a promising alternate investment platform to raise funds in the real estate sector, said Vimal Nadar, Head of Research at Colliers India.

It has helped developers monetize their rent-yielding asset and exit at a good valuation. Listed REITs in India have successfully provided an annualized distribution yield return of 6-7%. The success of office REITs in India has created even stronger interest from global funds to invest in development assets and has paved the way for other asset classes as well, Nadar said.

REIT in Retail is timely to unlock potential real estate value, as the sector is bouncing back, with developers & investors focusing on building, operating & acquiring profitable retail assets.