Last year was tough for Real Estate Investment Trusts (REITs). They had a hard time because things like office spaces and business properties weren’t doing well. REITs like Mindspace Business Parks and Embassy Office Parks saw their values drop by around 5.4%, and Brookfield India Real Estate Trust went down by 16.3%. But a new REIT called Nexus Select Trust did well, gaining about 28% since it started in May.
The person in charge of investing at Waterfield Advisors, Shantanu Bhargava, said that REIT prices went down because of big things happening, like more people working from home, less hiring in the tech industry, worries about the world economy slowing down, and higher interest rates.
Even though REITs struggled, regular real estate and the stock market did great in 2023. Regular real estate companies focusing on houses did well, making more sales.
Looking ahead, experts think 2024 might be better for REITs. They’re hopeful because the government might change some rules about where businesses can set up in special zones. REITs invest in places like office buildings, and if these rule changes happen, they could grow more with the economy. But they might not grow as fast as the companies that sell houses, according to Unmesh Kulkarni, who’s an advisor at Julius Baer India.
REITs could do better in 2024 if the government changes these rules. So, let’s see what happens next!
(Source: ET Realty)