REITs Can Earn $8 Bn in Rental Income by 2019

NEW DELHI : Rental income potential of Grade A office space stock in eight major cities is estimated at nearly $8 billion (about Rs 51,800 crore) by 2019 which can be tapped by Real Estate Investment Trusts (REITs), a report said.

Real estate consultant Cushman & Wakefield, in its joint report with industry chamber PHDCCI, also made a strong case for completely exempting such trusts from taxation on rent, stamp duty, transfer of assets and distribution of dividends. Of the total estimated rental income between 2015-19, the existing inventory of Grade A office space could provide REITs an opportunity to generate an estimated rental income of $5.4 billion (approx 35,500 crore).

The listing of REITs in India would encourage many mid-sized development firms to consider this avenue, as REITs would provide them with exits and an incentive to develop high-grade buildings.

Seeking tax exemption on REITs, PHDCCI said that the cost incurred on various taxes and stamp duty reduces the valuations of REITs and make them unviable and unattractive for investors and corporations.
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