REITs: New investment option for the real estate investors
REITs (Real Estate Investment Trusts) were introduced in the budget session this year by finance minister Arun Jaitley. It will allow us to own a small part of every piece of property we walk into, be it the restaurant down the street, a friend’s flat or our office buildings.
On top of that about 90 % of the rent of those properties will be sent right back to the individuals owning them. Even though it sounds too good to be true, it is possible via the REIT route.
While one may not own the properties outright, through real estate investment trusts (REITs), one can invest in the companies that own these properties, and much more. REITs have been in the news of late, after SEBI (Securities and Exchange board of India) issued guidelines for them within the regulatory framework.
Investors, both wholesale and retail, will now have another avenue to invest in real estate through a regulated fund route. The Budget has also introduced tax incentives for REITs. They have been given a ‘’pass through’’ status.
Through REITs, individual investors can invest in companies that can own and operate real estate and property across India.‘Property’ includes commercial property (office buildings, shopping malls etc.) and residential property (apartments, single-family homes and mortgages etc.) Any building which wants to raise funds can launch REITs provided they meet the criteria created by SEBI.
Source- The Financial Express
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