Construction Industry News
Tata Realty and Infrastructure Ltd will expand its commercial real estate portfolio to at least 12 million square feet over the next 2-3 years before considering launching a public real estate investment trust (REIT) issuance to monetize its rental office assets.
In an interview with PTI, the company's Managing Director (MD) and Chief Executive Officer (CEO) Sanjay Dutt said the company has 7 million square feet of commercial rental portfolio, almost all of it office assets, and that it is making huge investments in expansion.
On Saturday, Tata Realty announced an investment of Rs 5,000 crore over the next 7-8 years to develop a 7 million square meter IT park project in Navi Mumbai in partnership with UK-based investment firm Actis.
Asked if the company would look into the floating public REIT issuance at some point, Dutt said, "We will. We already have 7 million square feet. So technically we can do it today (REIT)."
“But we think in the next 2-3 years, once we've scaled up our portfolio, we'll study the market, discuss with our partners, and then think about REIT,” he said.
Over the next 2-3 years, Dutt said the company plans to expand its portfolio to "at least 12 million square feet" before considering REIT.
The occupancy rate in the operational company buildings is currently around 95 percent.
At present, three publicly traded REITs -- Embassy Office Parks REIT, Mindspace Business Parks REIT and Brookfield India Real Estate Trust -- are listed on Indian exchanges.
In addition to IT parks and data centers, Tata Realty will also invest in the development of shopping center projects in major cities such as Delhi-NCR, Mumbai and Bengaluru.
"We will also continue to invest in retail," Dutt said.
The company had sold two shopping centers in Amritsar and Nagpur to Singapore-based Virtuous Retail South Asia for Rs 700 crore at the end of 2019.
Dutt said the company divested these retail assets because it wanted to focus on the major cities.
Out of the total portfolio of 7 million square meters, the company currently has a 300,000 square meter multi-storey parking project in Gurugram, Haryana.
As part of its expansion plan, Tata Realty laid the groundwork for its new IT park project 'Intellio Park' on Saturday, spanning 47.1 hectares of land in Ghansoli, Navi Mumbai.
The first REIT of Rs 4,750 crore issue size was listed in April 2019 by Embassy Office Parks, backed by the Bengaluru-based embassy group and global investment firm Blackstone.
In August last year, K Raheja, backed by Mindspace Business Parks, launched the country's second REIT to raise Rs 4,500 crore.
Global investment firm Brookfield launched the country's third REIT this year to raise Rs 3,800 crore. Realty major DLF is also making its rental division DLF Cyber City Developers Ltd (DCCDL) REIT ready.
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