Interesting REITs emerging soon
Here are several interesting REITs that operate globally, some of them will soon emerge in India >>
REITs is an emerging asset class in India and has been growing rapidly over the last 3-4 years.
In simple terms, a REIT is a company that owns and operates income-producing real estate assets. While commercial offices & retail spaces come to mind as fitting this definition, the space is far wider than that.
In India, currently there are listed REITS in only 2 categories:
▶️ Office REIT: This is Embassy REIT, Mindspace Business Parks & Brookfield India Real Estate Trust all own and manage office space in India.
▶️ Retail REIT: Nexus Select Trust is India’s only retail REIT at the moment.
However, a look at the US REIT market will showcase a wide variety of real estate assets which could be operated as a REIT. While some of these options might seem straightforward, others could prove to be intriguing.
▶️ Industrial REITs: Industrial REITs invest in assets such as warehouses, distribution centers, logistics facilities, manufacturing plants. The world’s largest REIT Prologis, currently values at US$100 bn, is an industrial REIT.
▶️ Data centre REITs: Equinix is the largest data centre REIT & is currently valued at US$73 bn. Significant activity is expected in this space given that the India’s data center capacity has undergone exponential growth surging from 350 MW in 2019 to 1700 MW by April 2024.
▶️ Healthcare REITs: This category includes hospital, senior housing, life sciences & research facilities. Welltower™ Inc. (NYSE:WELL) is the largest healthcare REIT & is valued at US$60 bn. Recently a fractional ownership player Strata had offered an opportunity for an upcoming hospital in Hosur.
▶️ Hospitality REITs: This category primarily includes hotels & resorts. Host Hotels & Resorts is the largest hospitality REIT valued at US$12 bn.
▶️ Storage REITs: This category includes facilities provide individuals and businesses with space to store their belongings such as household items, furniture, vehicles, inventory, and other goods. Public Storage is the largest Storage REIT valued at US$49 bn.
▶️ Communications REITs: This category includes properties related to communication infrastructure. These properties primarily include cell towers, data centers, fiber-optic networks, and other telecommunications infrastructure assets. American Tower Corp is the largest communications REIT valued at US$88 bn.
Here is another REIT that you may find intriguing >>
▶️ Prison REIT: In the US, Core Civic, one of the largest private prison operators used the REIT model. However, with the Biden administration bringing an end to the contracts with private prisons for federal correctional facilities, the company has decided to go private.
As the Indian REIT market develops over the years, I expect several REITs being listed, operating in the above segments. Do comment if there are some other real estate assets which could be listed as REITs.
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