MF investment in REITs rises 6-fold to `3,972 cr in 2020

New Delhi: Emerging investment instrument REIT seems to have finally gaining popularity among investors, with mutual funds investing a staggering Rs 3,972 crore in such units in 2020, a six-fold jump from the preceding year.

Green Portfolio co-founder Divam Sharma said that with names like DLF, Brookfield and Godrej in the process of launching REIT, more interest from mutual funds in such offerings is expected in the coming years.

He further said 2021 looks better from the standpoint of mutual funds investing in REITs, as business is seeing normalcy after a setback from COVID-19 in 2020.

REITs and InvITs are relatively new investment instruments in the Indian context but are popular in global markets. While REIT comprises a portfolio of commercial real assets, a major portion of which are already leased out, InvITs comprise a portfolio of infrastructure assets such as highways and power transmission assets.

Fund managers infused Rs 3,972 crore in real estate investment trusts (REITs) in 2020 as compared with Rs 670 crore in 2019, data with the Securities and Exchange Board of India (Sebi) showed. Sharma said the interest from mutual funds in REITs come from factors including availability of enough liquidity flows to MFs, low interest rates regime, positive outlook of rental yields, and efficient listing framework by the regulator for their launches.