REITs to Attract $10 Billion Investment in the Next 2 Years
Top real estate developers are vouching for a huge investment of around $10 billion over the next couple of years, by bundling as much as 100 million sq ft of commercial property into REITs (Real Estate Investment Trusts). Looks like Blackstone, Panchsil, Embassy, K Raheja, RMZ, and DLF will kick start this trend, as they plan to list nearly 75 million sq ft of property over the next couple of years, after REITs obtain clearance.
Chairman and country head of Jones Lang LaSalle India (JLL), Anuj Puri says this move will especially benefit the foreign investors, who currently don’t have the option of buying into properties like stand-alone buildings and shopping malls. With the introduction of the REITs, foreign investors will gain access to this property space.
The only obstacle in the minds of stakeholders is the unclear tax structure. Currently, it seems like REITs would be taxed at three levels. Plus, there’s no clarity on whether dividends from REITs and dividends from companies will be treated alike. The same can be said about capital gains – it’s unclear whether it’ll be treated like in the case of equity and mutual funds. For instance, if an investor holds equities for over 12 months, capital gains is considered nil. Is that the case even for REITs? No one knows for sure.
A dividend distribution tax could prove detrimental, as 90% of the incomes are typically distributed in the form of dividends. If the tax charged isn’t high, the negligible tax impact will keep the investors optimistic about earning good returns.
Source: Financial Express
$10 Billion Investment in the Next 2 Years, 90000 crore could be tapped by the REIT, Blackstone, DLF, Embassy, K Raheja, Panchsil, REIT, RMZ
