MUMBAI | BENGALURU: Real estate developers building commercial properties, including office blocks and retail malls, are increasingly looking to lease their properties than selling them on outright basis or monetising them through lease rental discounting (LRDs) given the imminent opening up of REIT market in India.
Possibility of better valuation and control through this new option is holding back developers, who have so far stuck to the strategy of either complete or strata monetisation or even selling properties on outright basis.
“The office market has been growing steadily since past few years and we expect the trend to continue. In such times, rental yielding asset owners might want to hold their properties and enjoy better valuations and also list them through REIT rather than monetise them at a go,” said Shobhit Agarwal, managing director–capital markets, JLL India. However, according to him, the launch of the first REIT seems to be at least 2-3 away and the success of initial REITs will decide the fate of this market in India.