Data Benchmarking Institutions (DBIs) launched: the First of its Kind for a class of Capital Market Instruments, to Empower Indian REIT Investors with Standardised, Comparable Data for Informed Decision-Making
FinTech BizNews Service
Mumbai, September 18, 2024: Indian REITs Association today announces the launch of the Data Benchmarking Institutions (DBIs), a significant step towards empowering Indian Real Estate Investment Trusts (REITs) investors, in the presence of SEBI. As a central repository of standardised and comparable data, DBIs will enhance transparency and ease of access to information in India’s emerging and promising REIT sector. This initiative is crucial for building a robust information database and improving market efficiency as the REIT sector evolves. As part of this initiative, under SEBI’s guidance, three leading financial services companies—CareEdge, CAMS, and KFintech—have launched dedicated platforms to house all key information regarding REITs, assisting investors with their investment decisions. These platforms will provide comprehensive information and comparative analysis to help investors assess the performance of various Indian REITs. The DBIs will offer investors access to detailed information on REIT performance, operational metrics, valuation standards, and disclosures. This will empower investors to make data-driven decisions, allowing for better investment diligence and more informed investment choices.
Commenting on the launch, Shri Ashwani Bhatia, WTM, SEBI said, “This is the first of its kind initiative in respect of a class of capital market instruments, namely REITs and a significant step forward in empowering investors with critical information needed to make informed decisions when investing in REITs. By providing comprehensive and transparent insights, the platforms align perfectly with SEBI's endeavour to enhance market transparency. We believe that such initiatives will foster greater confidence among investors and contribute to the overall growth and stability of the securities market in India.”
SEBI has already identified capital formation for infrastructure and real estate as one of the core focus areas for Financial Year 2024- 2025. It may also be mentioned that Hybrid Securities Advisory Committee chaired by Mr. K.V. Kamath aids SEBI in understanding market needs and helps formulate policies for growth opportunities in the Hybrid Securities space. The launch of the DBIs is set to herald a new chapter in data transparency in the Indian capital market. The Indian REITs Association said in a statement, "The DBIs is yet another reform aimed at improving transparency in capital market and strengthening investor protection. This initiative will significantly enhance awareness and confidence in the asset class by providing comprehensive data on all REITs in one place. By making key operational and financial information about all REITs accessible, the DBIs offers a holistic view of REIT investments. This insightful data platform is set to support the growth of the Indian REIT sector."
Commenting on the launch, Mr. Anuj Kumar, MD of CAMS, said, "We are very excited to launch our REIT data benchmarking portal 'compareitnow.in,' which is designed to demystify REITs for investors exploring this asset class. The portal illustrates the benefits of REITs and provides comparative metrics across various dimensions, helping investors make informed decisions. We have built simulation models and calculators which investors can use to identify suitable REITs for investment, based on their preferred evaluation criteria." Mr. Mehul Pandya, MD and Group CEO of CareEdge, commented, “Our ReitsInfraEdge platform will empower retail and institutional investors to benchmark the performance of REITs for more informed investment decisions. Our unique and flexible CareEdge standard valuation model will enable investors to understand the drivers of valuation for the underlying properties. Further, investors can modify assumptions to arrive at their own assessment of value, based on their judgment.”
Mr. Sreekanth Nadella, MD & CEO of KFintech, said, “KFinsights (www.kfintech.com/kfinsights) is designed to educate, empower, and engage investors in Real Estate Investment Trusts (REITs), an asset class set to benefit from India’s infrastructure growth. KFintech’s omni-channel platform serves as a centralised repository for all REITs in India, enabling users to compare financial performance, operational metrics, market positioning, debt profiles, and benchmarks. By leveraging real-time industry integration and machine learning-driven business analytics, KFinsights provides investors with actionable and outcome-oriented information. This comprehensive platform integrates data-driven analysis with educational content, helping investors make well-informed decisions that align with their financial goals and risk tolerance.”
Currently, there are four publicly listed REITs in India:
Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, and Nexus Select Trust. The Indian REIT market now oversees gross Assets Under Management (AUM) of over Rs1,40,000 crore. The portfolio managed by these REITs spans approximately 125 million square feet of Grade A office and retail space across the country. Evolution of REITs in India: The journey of REITs in India began with the introduction of regulatory guidelines in 2014, culminating in the public launch of REITs in 2019 with the listing of Embassy REIT. Following this, two more REITs were listed on Indian exchanges—Mindspace Business Parks REIT in 2020 and Brookfield India Real Estate Trust in 2021. In May 2023, India’s first retail REIT, Nexus Select Trust, was listed. Indian REIT regulations mirror international REIT standards and have played a key role in facilitating the institutionalisation of the Indian commercial real estate market. Indian REITs are required to invest 80% of their portfolio in income-producing properties, pay out at least 90% of net distributable cash flows to investors semi-annually, and are limited to a financial leverage of 49%.
