Thanks for starting the thread @dd1474. I’m also fairly bullish on the long term investment prospects for REITs at current valuations given the hugely favorable demographics (young population, 5-10 million joining the workforce each year for the next decade at least, etc.), cost arbitrage (outsourcing - India has approx. 50% market share of all global captives, 10-20% office rentals compared to west/APAC and cheaper labour) and market share consolidation towards grade A office suppliers.
Anyway few thoughts from my side on some positives mentioned in your opening post:
Most of the tenants have long term leases and cannot immediately shut shop and go away. There are big penalties involved in case a tenant does decide to terminate the contract midway. So it is important to track the trend of vacancies and whether MTM gains are being realized when they come up for renewals. While the distributions during this period illustrates the quality of its tenants, there was no other listed REIT during April - August which can be judged on this metric. If the pandemic situation continues for another 4-6 months with largely empty offices >75% employees wfh, that’s when we can really check if vacancies are still muted and business is going strong.
The key thing about the asset acquisitions is, are they DPU accretive? At that time’s prevailing market price of ~350, the acquisition was slightly DPU accretive only adding a few % point increase to DPU. I’d say the quality of the asset in this case was the highlight of the deal since ETV has occupancies of more than 95% which is unheard of in commercial real estate. But overall the deal valuations were not going to make much difference to unit holder returns over the short term.
Also, personally I’ve stayed inside Embassy Tech Square (right next to Embassy Tech Village) for 1 year between 2019-2020 while I was on a client project and first hand experienced the quality of the infrastructure / grade A offices. At that point in time, there was definitely huge demand for quality office spaces in that vicinity - that whole road, Bangalore outer ring road is filled with multiple grade A office complexes over a 5-8 km stretch.
I’m really surprised at the DPU projection for FY23 building in 15% growth in NDCF! If that does turn out, it’s currently available at a 9% yield. Can you share the Kotak report which explains this increase (wondering if this is on account of the big 1.1 msf pending lease out to JP Morgan) There is a huge risk with the current pandemic that rentals may not increase significantly until there is normal business resumption.
In terms of key negatives - I think you’ve already highlighted most of them. One more could be around the Embassy management (not REIT) - something which I wasn’t very aware. Saw this on Twitter and also now highlighted by someone else on the VP REIT thread. Would be great if people who know more about Jitu Virwani can share some details and why people have a very negative opinion about him.
https://twitter.com/moneybloke/status/1377103159055687681?s=20
A lot 
. Screener info is not correct, better if you go through the company’s disclosures / investor presentations on exchanges.
Disc: Invested in all 3 REITs with Embassy allocation at 66%.