• Home
  • Blog
  • Buyers Guide
  • “Unlock the Secrets of Brookfield REIT: Your Ultimate Guide to the Third REIT”
July 16, 2023

Introduction

Brookfield Asset Management, one of the largest alternative asset managers in the world, recently launched Brookfield Real Estate Investment Trust (REIT) in India. It is the country’s only institutionally managed public commercial real estate offering. This marks the third REIT to be listed on the Indian stock exchanges, following Embassy Office Park REIT in 2019 and Mindspace REIT in 2020. With the addition of Brookfield REIT, the total market capitalization of REITs in India now stands at $8 billion.

What are REITs?

Real Estate Investment Trusts (REITs) are organizations that own, finance, and operate income-generating real estate properties. These companies manage high-value real estate assets, put them on lease, and collect rent. The rental income is then distributed as dividends among the REIT’s shareholders. Investing in REITs is a popular option for generating capital for investors.

READ MORE:  "Master Your Mortgage: Calculate Your Axis Bank Home Loan EMI with Ease"

Brookfield India REIT Portfolio

  • Brookfield India owns large campus office parks in Gurugram, Noida, Mumbai, and Kolkata, covering approximately 14 million square feet.
  • The company has a diverse portfolio worth $17 billion, including office properties, infrastructure, real estate, private equity, and renewable power assets.
  • In addition to office properties, Brookfield India also owns toll roads, wind and solar assets, a construction business, and real estate management services.
  • Notable clients of Brookfield India include Bank of America, Barclays, Accenture, Tata Consultancy Services, RBS, and Cognizant.
  • Brookfield India REIT has maintained an impressive occupancy rate of over 94% for the past four financial years.
READ MORE:  "The Future of Real Estate: Opportunities and Risks for Developers, Entrepreneurs, Homebuyers, and Investors

Peer Comparison

Brookfield REIT’s IPO was priced at ₹275 per unit, which is approximately 88.4% of its net asset value. This pricing is comparable to the earlier REITs like Mindspace Business Park and Embassy Office Parks REIT, which are trading at around 98.9% to 93.6% of their net asset value, respectively. Thus, Brookfield REIT seems to be reasonably priced, similar to its predecessors.

Name of the REIT Embassy Office Parks REIT Mindspace Business Park Brookfield India REIT
Issue Period 18th-20th March, 2019 27th-29th July 2020 3rd-5th February 2021
Issue Size ₹4,570 Crore ₹4,500 Crore ₹3,800 Crore
IPO Price ₹299-300/Share ₹274-275/Share ₹274-275/Share
Min Application Size 200 Units 200 Units 200 Units
Total completed Area 26.2 Mn Sq.Ft. 23 Mn Sq.Ft. 10.3 Mn Sq.Ft.
Area under development 2.6 Mn Sq.Ft. 2.8 Mn Sq.Ft. 0.1 Mn Sq.Ft. under construction; 3.7 Mn Sq.Ft. of future development
Dividend distributed in FY2020 ₹24.39 per unit No dividend announced yet No dividend announced yet
Avg Rent/Sq.Ft. ₹68 ₹52.5 ₹62
Occupancy Rate 92.20% 92.40% 92%
Geographical Presence Bangalore, NCR, Mumbai, Pune Pune, Mumbai, Chennai, Hyderabad Mumbai, Noida, Gurugram, Kolkata
Minimum Investment at Current market prices (15th Feb 2021) ₹69,900 (200 units @ ₹349/unit) ₹63,600 (200 units @ ₹318/unit) ₹55,000 (200 units @ ₹275/unit)

Market experts believe that the launch of Brookfield REIT’s IPO will give a much-needed boost to the real estate investment trust space. Despite concerns about the increasing adoption of remote work culture affecting the demand for commercial real estate, Brookfield India REIT reported a profit of ₹15.12 Crore in 2020, a significant turnaround from the loss of ₹15.75 Crore in 2019. The high investor participation in Brookfield REIT indicates the product’s growing acceptance in the market.

READ MORE:  Advance Payments and Interest Rates

Frequently Asked Questions

1. What is the significance of Brookfield REIT?

Brookfield REIT is India’s third listed real estate investment trust (REIT) and the only one to be institutionally managed. Its launch strengthens the REIT market in India and adds to the options available for investors in the commercial real estate sector.

2. How does Brookfield India REIT generate income?

Brookfield India REIT generates income by leasing out its high-value real estate properties to tenants. It collects rental payments from these tenants and distributes the rental income as dividends to its shareholders.

3. What is the occupancy rate of Brookfield India REIT properties?

Brookfield India REIT properties have maintained an impressive occupancy rate of over 94% for the last four financial years. This indicates a strong demand for the company’s office spaces among tenants.

READ MORE:  One Time Pay or EMI : The Better Option

4. How does Brookfield India REIT compare to other REITs?

Brookfield India REIT is reasonably priced compared to other REITs in the market, with its IPO pricing at approximately 88.4% of its net asset value. This places it in a similar valuation range as the earlier listed REITs, such as Embassy Office Parks REIT and Mindspace Business Park REIT.

5. Which companies are the clients of Brookfield India REIT?

Brookfield India REIT counts multinational companies like Bank of America, Barclays, Accenture, Tata Consultancy Services, RBS, and Cognizant among its clients. These prominent companies rely on Brookfield India’s office spaces for their operations.

READ MORE:  "5 Expert Strategies to Triumph Over the Rent vs Buy Conundrum During a Crisis"

6. What is the market capitalization of REITs in India?

The market capitalization of REITs in India currently stands at $8 billion, with the addition of Brookfield India REIT to the listed REITs. This reflects the growing interest in the REIT sector among investors.

7. Has Brookfield India REIT been profitable?

Yes, Brookfield India REIT reported a profit of ₹15.12 Crore in 2020. This marked a substantial improvement from the previous year when the company incurred a loss of ₹15.75 Crore. The positive financial performance indicates the potential of the company in the market.

Conclusion

With the launch of Brookfield Real Estate Investment Trust, the REIT market in India has expanded further, offering investors a new avenue for investing in commercial real estate. Brookfield India REIT brings a diverse portfolio of high-value properties across multiple locations, attracting renowned multinational clients. Despite the rise of remote work, the company has maintained a strong occupancy rate and demonstrated profitability. The successful IPO launch of Brookfield India REIT indicates a growing acceptance of REITs in the Indian market. Investors can explore this investment option to access the potential benefits of the commercial real estate sector.

READ MORE:  Property Tax VS Real Estate Tax : The Difference

Hello Reader !

If you found value in this blog post, we kindly ask you to share it with others, helping to expand their knowledge in the process. Additionally, if you are currently in search of property opportunities in Faridabad, we invite you to connect with us through our contact page.

At Faridabad Property Deals, we specialize in assisting individuals with their property needs, whether it’s buying, selling, renting, or investing. Our team of experts is dedicated to providing exceptional service and ensuring a smooth and successful experience for our clients.

To explore the available property options or to discuss your specific requirements, please call +91-9818591388 o r visit our contact page at https://faridabadpropertydeals.com/contact/. We are eager to assist you in finding the perfect property solution that aligns with your needs and preferences. Thank you !

READ MORE:  Why Home Insurance is critically imortant?
{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}