Embassy REIT to Invest Over Rs 100 Crore in Bengaluru Metro Stations Development

Embassy Office Park REIT is investing over Rs 100 crore to develop metro stations in Bengaluru, according to CEO Aravind Maiya. The move is part of a broader effort to contribute to the city's infrastructure development, particularly to address traffic congestion and enhance public transportation.

"To tackle some of Bengaluru’s basic infrastructure challenges, like traffic, we have already invested Rs 180 crore in constructing a flyover to decongest the Manyata Tech Park area. Additionally, we’ve built a footbridge with a Rs 20-30 crore investment and are now working on metro station developments," Maiya stated during the Royal Institution of Chartered Surveyors Commercial (RICS) Real Estate conference held in Bengaluru on September 12.

Maiya emphasized the importance of public-private partnerships in driving Bengaluru's infrastructure projects. "As Bengaluru continues to develop, we have a significant opportunity to collaborate with the government to ensure the necessary infrastructure is in place for the city’s growth," he added.

Public-Private Collaboration and Future Metro Projects

In 2020, the Embassy Group entered into an agreement with Bengaluru Metro Rail Corporation Limited (BMRCL) to fund the Bettahalasur metro station project, which was set to be developed between Bagalur Cross and Trumpet Junction at a cost of around Rs 140 crore. However, as reported by Moneycontrol, the project’s current status remains unclear, casting doubt on whether the station will be developed as planned. This station would have provided direct metro access to the Embassy Boulevard complex, offering a convenient commuting solution for employees and residents.

Changing Landscape of REITs in India

Real estate experts have noted significant improvements in the transparency and safety of Real Estate Investment Trusts (REITs) as an investment platform in India. Mindspace Business Parks REIT CEO Ramesh Nair commented on the evolution of REITs, stating, "Compared to five years ago, developers now have clearer commercial strategies. The regulations in place have ensured that REITs are now a transparent and safe platform for investments."

One of the pivotal regulatory changes occurred when the Central Government amended the Special Economic Zones Act on December 6, 2023, allowing partial de-notification of certain areas for non-SEZ use. This change has paved the way for increased occupancy levels within REIT properties, further boosting their investment potential.

Embassy REIT’s Growth Trajectory

Embassy REIT’s focus on infrastructure projects, such as metro station developments and flyovers, underscores its commitment to enhancing Bengaluru’s urban landscape. The REIT has also experienced substantial growth in its investor base. "When we started, we had around 4,000 unit holders, but now we have over 1.2 lakh unit holders," Maiya revealed, highlighting the increasing popularity of REITs as a reliable investment avenue.

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REITs in India are evolving rapidly, driven by favourable regulatory changes and the growing demand for real estate investments in commercial and residential spaces. Embassy REIT’s proactive involvement in developing public infrastructure not only supports the city’s growth but also strengthens its position as a key player in the real estate investment market.

Reference: MoneyControl