REITs Center

Insurance Companies – Investment in Debt Securities issued by Real Estate Investment Trusts
May 2019

This article will cover the below:

• Typical REIT Structure
• Why REITs?
• Domestic Institutional Investor in REITs
• Approved Investments for Insurance Companies
• Rationale for participation of Insurance Companies in debt securities issued by REITs
• Suggested Framework

Australia was the top performer over the last 12 months through April (20.3%).  
Baker McKenzie proposes “Making G-REITs Happen” to support GBA Development.

The first Indian REIT Embassy Office Parks REIT was listed. APREA helped SEBI connect with the investors before the regulations were notified and for investor outreach thereafter, which helped to alert the international market on Indian REITs.

This year, India witnessed the launch and successful listing of its first Real Estate Investment Trust (REIT) by Blackstone and Embassy. This key event marked the opening of a fresh investment avenue and unfolded a bright new chapter for the country’s real estate sector. To add to it, the Securities and Exchange Board of India reduced the minimum allotment value from the initial INR 2,00,000 to INR 50,000 only giving further push to retail investors to invest in this new investment vehicle.

• Hong Kong REITs posted the best performance in February.
• China is the top source of Hong Kong outbound capital in terms of dollar value with US$6.3 billion.

• Asia Pacific REITs are the strongest long-term performers with relatively low volatility vis-à-vis major indices。
• For Australia REITs, the industrial sector was the strongest performer with a 26% total return over the 12-month period through June 2018. 

This report tracks capital raisings and debt issuance for AsiaPac REITs. It reveals:

This report tracks capital raisings and debt issuance for AsiaPac REITs. It reveals:

• trends in equity and debt velocity;
• debt maturity profiles by sector; and,
• debt maturity schedules for individual funds by country.

Infrastructure and real estate are the two most critical sectors in any developing economy.

A well-developed infrastructural set-up propels the overall development of a country. It also facilitates a steady inflow of private and foreign investments, and thereby augments the capital base available for the growth of key sectors in an economy, as well as its own growth, in a sustained manner. A robust real estate sector, comprising sub-segments such as housing, retail, hospitality and commercial projects, is fundamental to the growth of an economy and helps several sectors develop significantly through the multiplier effect.

However, both these sectors need a substantial amount of continuous capital for their development.

Currently,

Infrastructure and real estate are the two most critical sectors in any developing economy.

A well-developed infrastructural set-up propels the overall development of a country. It also facilitates a steady inflow of private and foreign investments, and thereby augments the capital base available for the growth of key sectors in an economy, as well as its own growth, in a sustained manner. A robust real estate sector, comprising sub-segments such as housing, retail, hospitality and commercial projects, is fundamental to the growth of an economy and helps several sectors develop significantly through the multiplier effect.

However, both these sectors need a substantial amount of continuous capital for their development.

Currently, India’s real estate sector is the second largest employer in the country after agriculture and is slated to grow at a steady pace over the next decade. At the same time, the infrastructure sector, which includes segments such as energy, transport, water and sanitation, communication, and social and commercial infrastructure, is the focus area for key policymakers, banks and corporates to formulate and implement regulations. This is expected to ensure the time-bound creation of world-class infrastructure in the country. India’s real estate industry has witnessed a paradigm shift from traditional finance to an era of structured finance, private equity and public offering.