Rupees 90,000 crore could be tapped by the REITs in the first year
The Real Estate Investment Trusts are hoping to get a positive signal soon in matters of the Budget which is coming up soon. They could soon come up with a fresh way of funding for all those developers who are struggling with increasing cost of funds as well as the sales which are rapidly declining.
REITs could make an investment of about Rupees 90,000 crore within the first year of operations itself. They happen to be very similar to all mutual funds and have the option of being traded on exchanges. There are quite a number of people in the industry who believe that even the entities that are owned by the government (who tend to have huge portfolios of offices) could try and sell them off to REITs and lease them back too.
There are several companies such as Infosys and Wipro who are hoping to sell off their office assets to REITs and lease them too. When REITs decides to buy huge assets from the property developers, it helps them to back pack all their loans. Mangat Rai who happens belong to the M/S Subhash Mangat and Company mentioned that most of the developers have projects that are stuck because of money. This will lead to the increment of liquidity in the sector.
Source – Realty Bites
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