Real estate investors alert! Here is how a retail investor can benefit from REITs
REITs is a vehicle for small and mid investors in the commercial realty and gain at least a return of 7-8 per cent annually going up to 12-15 per cent in long-term.
Incepting a milestone in the Indian real estate sector, the Real Estate Investment Trust (REIT) has finally made its debut into the Indian real estate sector. The commonly pronounced 'Embassy REIT' has been grabbing headlines and since then it has been oscillating into the minds of how it will help an individual or retail realty investor. The industry insiders are of the opinion that post-REITs, Investors can earn two types of income from REITs, one through capital gains post the sale of REIT units and the other via dividends.
Commenting on the matter Deepak Kapoor, former President, CREDAI — Western UP chapter said, “Investors can earn two types of income from REITs, one through capital gains post the sale of REIT units and the other via dividends. Stating about the ROI (Return on Investment), it is highly structured, realistic and risk-averse in REITs. REITs as an instrument will be ideal for investors who want to invest in real-estate for a steady income without the risk and nuisance of a typical real-estate investment.”
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Dhiraj Jain, Director, Mahagun Group said, "There will be a structured approach to leasing, leading to more regular performance evaluation of brands within malls. Importantly, investors also look for options where the exit is possible and with REITs, the options for exit opens up. This will bring more liquidity in the market that will help the sentiments to move in the right direction."
Standing in sync with Deepak Kapoor's views Harinder Singh, Managing Director, Reach Group said, “Real Estate Investment Trusts (REITs) is to become a reality in India and change the way India has been investing into commercial real estate. It is a great vehicle for small and mid investors to participate in the commercial real estate market and generate minimum returns of 7-8 per cent annually going up to 12-15 per cent in long-term. REITs are also good news for those investors who want to invest in real estate but do not want to take on the headache of actively managing an investment. It works very well for retail investors who have a small appetite, as small as Rs. 2 lakh. REIT’s would be a good investment option for investors looking for steady returns, beyond fixed deposits and fixed income funds.”
Gaurav Kashyap, CEO Cherry Hill Interiors said, "REITs will give income in two ways i.e. one from capital gains post sale of REIT units and other via dividend and will be ideal for the retail investors who invest for steady income. Also it will help the retail investors with small appetite to invest in commercial real estate which is currently not feasible due to high value of investment involved."