Near term headwinds for REITs on FY22 lease expiry, weak demand

Strong base of technology sector tenants and valuations may provide support

Listed real estate investment trusts or REITs have been underperforming their peers in the real estate space over the past year on worries of falling occupancies, increasing lease expiries and lower new leases and its impact on revenues.

The stock of the largest listed player in this space, Embassy Office Parks REIT (Embassy) is down 4 per cent while the BSE Realty has more than doubled investor value (106 per cent) since May last year. Even Mindspace Business Parks REIT (Mindspace) which got listed in August last year has delivered a return of -8.2 per cent since then. 

In addition