Embassy REIT eyes city realty assets

Kolkata: Embassy REIT, one of the four real estate investment trusts (REIT) operating in India, is looking for real estate assets in Kolkata along with Chennai and Hyderabad. The REIT, promoted by Embassy and Black Stone, has most of its realty assets in Bengaluru. Abhishek Agarwal, the CFO of Embassy REIT, pointed out that diversifying portfolio is in the company’s agenda and it is looking at new destinations. Currently, 75% of its asset are in Bengaluru. Besides, Embassy has assets in NCR, Pune and Mumbai. REITs started operating in India from 2019 though it has been functioning from 1960 globally. Embassy now has 35 million sq ft rent-yielding assets in the country. It is now constructing 8 million sq ft and is planning to construct another 2 million sq ft. In India, REITs are allowed to operate in commercial property projects only. An REIT buys a real estate by raising money from investors and through debt. It then rent out the property and distribute the rent among stake holders as return. Agarwal claimed that in India it is offering post tax yield of 6.8%. “In India, we have to distribute 90% of our income. The REIT dividend is tax-free as per the regulation,” he added. The average occupancy of Embassy is 86% now, which was higher pre-Covid days. It has so far distributed Rs 8,000 crore to investors.