REITs – The Upcoming Real Estate Growth Story in India
REITs – The Upcoming Real Estate
Growth Story in India
REITs (real estate investment trusts) sounds
pleasant, but most of us do not know about
this. It was implemented in 2014 under the
income tax law of 1961 in our country.
Cushman & Wakefield & RICS reports say
that: "The investment opportunities in India's
top eight cities, including the Delhi, National
Capital Region, Bangalore, Mumbai and Pune
(Source: The Economic Times), are valued at
$44-440 billion." What does it mean? Will
this give the Indian real estate industry to
bring a gradual change? Let's find it here
A REIT is a:
A public or private company that owns real estate interests or real estate debt.
Pass most of the revenue and capital gains to shareholders.
REITs provided are taxable only on retained earnings which meet,
• Ownership requirements
• Management requirements
• Asset demand
• Income requirements
• Distribution requirements
Industry Association: National Association of Real Estate Investment Trust
1) Equity REITs
Owns and operates revenue-
generating real estate, including
leasing, real estate development, and
REITs must be acquired and/or
developed for operation
Once developed, you can no longer
sell these properties
3) Hybrid REITs
Loans to real estate owners and operators
2) Mortgage REITs
Direct loans to real estate owners and
Indirect borrowing through mortgage-
Only in the existing real estate
extension of the mortgage loan
The Possibility of high returns - Commercial real estate pays long-term returns. If we
talk about the U.S. market, the average annual rate of return for the first five years was
Optimal Allocation - Investment is expected to deliver significant returns as 80% of the
funds pooled by the investors will be used to complete the project's revenue. Only 20% of
the amount will flow into the mortgage guarantee, the equity share of the listed property
and so on.
Security - Investing in real estate investment trusts is safe; players with a minimum asset
size are established. at 100 billion rupees which will enter the market. Rs 2,50 crore have
been identified as their lowest initial quotes.
Unorganized sector benefits - The Commercial real estate in India will benefit.
According to a joint report titled "India REIT: Closer Reality," REITs will benefit from 1.73
billion square feet of the commercial real estate in retail, office and warehouse operations.
Real estate investment trusts may own the real estate industry because most of the trusts
will be listed on the stock market.
Real estate investment trusts may help organize the industry in a better way in the coming
years. The abolition of the Foreign Investment Promotion Board (FIPB) will attract foreign
investment in India and make the economy even broader.
REIT will become more popular
Market size will be Increase to 60%
Active in financial markets