REITs In India..Right Tool..Right Time !

REITs In India..Right Tool..Right Time !

By SiliconIndia   |   Thursday, November 28, 2013
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Bangalore : Investment and ownership options in the Indian economy have been diversifying leaps and bounds since the liberalization and globalization policy has been implemented in 1990s. The evolving platforms for investments and their novel sectors have come to substantially aid the expansion and scope of operations in the Indian trade and commerce. Interestingly, to the latest in the array, is the contemplation for introducing Real Estate Investment Trusts (REITs), a regulated investment mechanism for channelizing funds into the real estate sector. Securities and Exchange Board of India (SEBI)is mulling over the proposal to introduce the investment trusts for the developed properties in India . Under this trust, the common units/areas of a developed property will be offered to the public as an investment option. Such revenue generating property trusts are being opinioned as an option to relieve the cash-need ridden realty sector. Bonus funds and commercialization of properties is what will be realized by the introduction of the REITs. Once the proposal is ratified and implemented, the REITs will significantly encourage the investors to invest in the Indian real estateand extend its reach in the Indian trade market. Being associated with the developed and operational properties, a streamlined trading mechanism will smoothen the investment procedure and make it an inviolable investment destination for the public. The REITs are arguably being seen as a regular flow of income to people who choose to own, invest and trade the common areas in a developed asset. In accord to The Economic Times, as the REIT option is under contemplation in the present day, a thorough planning and few of the alterations will considerably enhance its profitability. Being looked upon as an investment/funding option via public's investments, REITs could realize its full potential once the minimum asset value of Rs 1000 Crore is brought down. The minimum assets value will reduce the scope of investments into the projects of lower worth and by smaller developers. Moreover the REITs should also encompass the infrastructure projects which generally prove to be a recurring source for flow of income. Moving forward, once the REITs are comprehensively planned and formulated, its operation in the trade market will induce a ray of positivity for the investment channels in the realty sector. Along with the REITs capacitating public to invest in the real estate sector, it will support the developers to unburden them off the debt and responsibly add to the further growth of real estate sector in India.
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