Office property market: REITs in play as leasing trends to gain traction

Distribution yields could go up but risk of covid infection, interest rates remain

Real estate investment trusts or REITs are expected to gain traction among investors as people return to office. Recent trends indicate that pure-play commercial (office) leasing stocks, represented by REITs, could be making a comeback after having lagged real estate stocks that rallied because of robust bookings in the residential market.

Real estate consultancy Cushman and Wakefield says net absorption of Grade A properties across the top 8 cities stood at 9.5 million square feet in the December quarter, a twofold sequential increase and the highest in the last nine quarters.

IIFL Securities’ Mohit Agrawal says gross leasing for listed REITs was