InvITs, REITs may get monetized from 2.1 lakh crore to over 3.5 lakh crore in the next single year, says ICRA
Substantial growth is expected to be witnessed by Infrastructure Investment Trust(InVIT) and Real Estate Investment Trust(REIT), which have floated structures before, enabling regulatory developments and now focussing on attractive investments in Infrastructure space.
The InVIT spaces have witnessed monetization of assets worth 85,300 crores and all three REITs assets worth 77,100 crores in the last two years. After the recognition as borrowers under the SARFAESI Act, the structures shall now have enough statutory enforcement options, the absence of which was a constraint earlier to borrow from bankers.
In addition to the investments, The Insurance Regulatory and Development Authority of India (Irdai) has permitted investors to invest in debt instruments of InvITS and REITs rated AA and above.
“The supporting regulatory framework for various stakeholders attracted both debt and equity investors towards these trusts. Till date, assets worth Rs 2.1-lakh crore have been floated through these platforms, and they together raised debt of Rs70,800 crores so far majorly through NCD route (62%) and term loans (37%),” said Mr Shubham Jain, the group head and senior Vice President of corporate ratings, ICRA.
Mr Jain of the ICRA further added,” In the actual property house, there are numerous builders and asset managers who’ve steadily built-up giant portfolios of REIT-ready belongings which could be monetized by way of this route. Of such portfolios, belongings value over Rs 1 lakh crore is prone to be listed within the close to medium time period. Infrastructure belongings with 3 to five years of working observe report throughout varied segments like, roads, gasoline pipeline, digital fibre, energy transmission and renewables are supreme candidates for monetization by way of this platform,”
Supporting the rise in consolidation and regulatory framework in addition with an observe report of five and above years for InvITs and more significant than two for REITs, the potential is huge.