Brookfield, GIC may not set up any investment trusts in near term

Canada’s Brookfield Asset Management and Singapore’s GIC, which own significant amounts of commercial properties in India, are not looking to float Real Estate Investment Trusts (REITs) in the country in the near term, said a person familiar with the development.

Brookfield, which holds a portfolio of 25 million square feet of office and retail assets, is adopting a ‘wait and watch’ policy so far as monetising its assets through REIT goes, said a person who is aware of its plans.

Embassy Office Parks, Blackstone’s JV with Embassy, which recently came out with its REIT issue, and the rental arm of K Raheja Corp, the probable REIT candidate, own commercial real estate similar to Brookfield’s.

Brookfield owns six special economic zones of Unitech Corporate Parks, the commercial property portfolio of the Hiranandani family in Powai along with Equinox Business Park in Mumbai. 
 

It has invested $4.5 billion in Indian real estate. Nasdaq-listed Brookfield Property REIT, a subsidiary of Brookfiled Property Partners, is one of the biggest REITs in the world.

On the other hand, Singapore government-owned GIC may not float any REIT in the country.

“It (GIC) is a long-term investor, need not float any REIT and exit its investments like Blackstone. It is content with rental income and price appreciation,” said an executive in the know.

GIC either fully owns or partly owns many marquee properties. It owns Nirlon IT park in Mumbai, and 33.34 per cent in DLF’s rental arm DLF Cybercity Developers, which has 27 million sq ft of commercial properties. A mail sent to GIC did not elicit any response.

GIC has backed many REITs such as Dexus Australian Logistics Trust in Australia in the past.
 

Shobhit Agarwal, managing director at Anarock Capital, said REIT porbables will wait and watch before hitting the market.

“While we do expect a few more REITs to follow, the rest would still want to wait and watch and see how the initial REITs perform. I believe there is nothing wrong in this strategy in preferring to hit the market once it matures. Sovereign and pension funds are generally long-term investors and prefer to enter the market when it is growing so as to enjoy the benefits of it maturing,” Agarwal said.