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Inability to hike rent, weak demand could lead to lower yields for office REITs

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MUMBAI : Commercial real estate investment trusts (REITs), which own and manage office real estate, are likely to suffer lower yields on deferment of new office leases and zero rent escalation in the near-term, as the covid induced lockdown and restrictions imposed to curb its spread, continues to cripple companies worldwide.

Slowing economic growth, weaker spending power of companies and an increase in work from home practices are some of the factors that will put pressure on rentals for commercial properties. “Though the occupancy and rentals for large commercial /office complexes may mostly remain stable for now, tenants may defer signing of new leases till they can recalibrate their needs to the post-covid scenario.

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Cases: 46 252 513
Deaths: 750 423
Recovered: 0
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Cases: 34 321 025
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Brazil
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Deaths: 141 607
Recovered: 0
Russia
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Deaths: 237 619
Recovered: 0
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