BSE launches REITs and Commercial Real Estate Index for passive investment products

BSE Index Services, a wholly owned subsidiary of BSE, on Wednesday launched the BSE REITs and Commercial Real Estate Index, a new benchmark designed to track the performance of listed real estate investment trusts (REITs) and companies with significant exposure to commercial real estate.

The index includes companies belonging to the REIT category as well as firms classified under the residential and commercial projects segment that derive meaningful exposure from commercial real estate assets and rental income.

The BSE REITs and Commercial Real Estate Index has a base value of 1,000, with September 2022 as the first value date. It will be reconstituted semi-annually in March and September.

Announcing the launch, Ashutosh Singh, MD & CEO of BSE Index Services, said the index is the first in the industry to provide focused exposure to India’s yield-generating real estate ecosystem, including office, retail and leasing-led business models.

He said the index combines listed REITs with companies having significant commercial real estate assets and rental income streams. It also incorporates a 20% cap on individual constituents to ensure diversification, making it suitable for creating investable products and targeted investment strategies.

According to BSE, the index can serve as the underlying benchmark for exchange-traded funds (ETFs) and index funds, while also being used for benchmarking portfolio management services (PMS), mutual fund schemes and institutional portfolios.

Also read: Only 1/5th the size of NSE? Why Jefferies predicts 27% upside for this near-monopoly stockThe launch expands BSE’s suite of thematic indices and comes amid growing investor interest in income-generating commercial real estate assets through listed REITs and related companies.

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