Why REITs will be a boon for India’s real estate :
As India moves towards better availability of high quality real estate, creation of the right encouraging atmosphere for investments holds the big key and this is where Real Estate Investment Trusts (REITs) will play a key role in terms of establishing best practices in the real estate segment.
As believed by many real estate experts, REITs are expected to get launched in about six to nine months time, close on the heels of Budget 2015.
When REITs are in place, it will dramatically change the real estate landscape in India and establish a new asset class, and provide a better investment proposition for risk-averse investors while providing twin benefits of yield as well as capital appreciation.
As far as real estate developers are concerned, creation of REITs will further enable the process of improving the transparency in the real estate property market. As confirmed by many real estate experts, it will also ease out the volatility of property cycles, and potentially lower the cost of capital as well.
How will it work?
And in order to initiate the process of creation for REITs, the Securities and Exchange Board of India or the SEBI has already announced its guidelines for the creation of real estate investment trusts (REITs) in India.
As part of the initiation process REITs will derive money from various investors and after collecting money, REITs will have the power to issue units to its set of investors, which will then be listed on exchange for buying and selling.