On Thursday, BofA Securities adjusted its outlook on Brookfield India Real Estate Investment Trust (BIRET:IN), increasing the price target to INR330.00 from the previous INR325.00. The firm continues to recommend a Buy rating on the stock.
The upgrade comes after the REIT reported new leasing activity of 0.7 million square feet (msf), surpassing the previous four-quarter average of 0.5 msf. Quarter over quarter, committed occupancy experienced a slight rise, moving from 84% to 85%. A significant portion of the leasing activity was noted in the Special Economic Zone (SEZ) portfolio, accounting for 66% of the new leases.
In addition to the strong leasing figures, the SEZ portfolio's leasing pipeline showed growth, increasing from 1.8 msf to 2.2 msf. This was attributed to the REIT's strategic demarcation of SEZ spaces in line with new regulatory policies, which seems to be yielding positive results.
The management team at Brookfield India REIT also pointed out a positive shift in tenant behavior, with Information Technology Enabled Services (ITeS) clients, which had been downsizing, now expanding their office space.
In a notable example from the second quarter, a prominent ITeS tenant increased its footprint within the REIT's properties from 160,000 square feet (ksf) to 255 ksf, reversing a previous trend of reducing office space globally.
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