Tuesday, August 19, 2014

What REITs will offer retail investors

The securities and Exchange Board of India (Sebi) has approved the much awaited Real estate investment trust (REITs) regulations. Based on the global experience on REITs, this could be the much awaited gift to retail investors in the Indian securities market.
Every common man dreams of investing in real estate. However,  investors have been facing multiple hurdles like prerequisite of huge capital accompanied with high cost of capital, the hassle of managing property, uncertainty of income, rigid exit formalities, taxation issues etc. The new REIT regulations address each of the above concerns. In fact, it opens up a new investment opportunity in commercial real estate which yields higher returns than residential properties.
Under REIT regulations, the retail investors can invest as low as Rs 2 lakh  and get a share of the real estate play. Compulsory listing of REIT units offers the desired liquidity to retail investors.
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