REITs (Real Estate Investment Trusts) are a great equalizer for the Indian real estate industry as they will open the doors for investors from across the spectrum to make safe and secure investments in the country’s realty market. After Securities and Exchange Board of India (SEBI) relaxed their REIT regulations, realty stocks surged by 4%. For the uninitiated,an REIT is a firm which possesses and/or finances revenue-generating real estate properties. REITs allow all kinds of smaller and larger investments in large-scale properties bringing in the concepts of diversified and long-term investing in the realty sector.
The REITs providing a platform to pool money for investment in properties, especially commercial ones, are first required to be registered via an initial public offering. Just like stocks, investors can buy REITs as securities from both the primary and secondary markets. REITs are registered with stock exchanges and are structured like trusts with their objective being able to provide investors with dividends acquired from the sale money of assets such as offices, residential units, hotels, shopping centres and warehouses etc. Other than the above advantages, REITs are expected to usher in the following changes in the Indian realty market: [Read more…]