Small Investors in Real Estate in Hyderabad To Gain From REIT’s Entry

Buyers with small budgets can buy commercial real estate in Hyderabad thanks to the aid of Real Estate Investment Trusts.  While in the past few years, savvy investors gained a great deal from India’s booming real estate sector, less keen investors and those with fewer means were left behind. However Real Estate Investment Trusts (REIT’s) shall make up for this lost opportunity among the less well off and less opportune as they allow even small investors to safely invest in real estate and at the same time to earn an attractive return. What makes REIT’s so attractive particularly to those with a modest budget is that they can secure a unit by investing a sum as low as two lakh rupees. 

REIT’s Have Been Green Lighted By SEBI

The Securities and Exchange Board of Indian has given the go ahead to REIT’s to operate in India and just as Mutual Funds pool funds from all across the country, so too shall REIT’s pool funds from across the country and invest it in commercial real estate in Hyderabad and in similar real estate in other large Indian cities. By investing funds in commercial real estate in Indian cities and towns, REIT’s shall enable small investors to partake in the blossoming real estate story unfolding today among commercial real estate in Hyderabad and in real estate in other large Indian cities. The entry into the real estate arena threw REIT’s for all investors shall be at a fraction of the cost of entry should they have had to invest in real estate in India through tradition and direct means.   

Legal Requirements For REIT’s

After being registered via an Initial Public Offering or IPO, REIT’s shall be listed with the countries stock exchanges and its stock will be bought and sold just as traditional stocks or securities. The minimum capitalization of an IPO issued of listed REIT’s shall have to be at least 250 crore rupees or greater, however any asset a REIT may Bangalore in has be 500 crore rupees or greater. The real estate units owned by REIT’s may be bought and sold either through the primary or secondary market.

The Details of How REIT’s Function

REIT’s will pool funds from numerous investors into profitable real estate in Hyderabad or real estate in other parts of the country. Units such as offices, residential units, warehouses, shopping centers, and hotels are all examples of the kinds Luxury apartments in hyderabad into which REIT’s can invest. The trusts with REIT’s will be listed with stock exchanges and hence REIT’s shall be structured in a fashion similar to trusts. 

How REIT’s Pay Investors

Properties in which REIT’s have invested are sold and the capital gains accrued from such sales is used to pay investors in the form of dividends. A trust is expected to pay 90 percent of the dividend it earns from capital gains to its investors. Just as mutual funds mitigate risk in the stock market, so too are REIT’s expected to mitigate risk while investing in commercial or residential projects in Hyderabad. 

Post By : Shrikant Sain

Buyers Showing Interest in Hyderabad Residential Market

Property buyers, who had mostly remained on the sidelines in the last twelve months post the bifurcation of Andhra Pradesh, are now showing keen fascination with the residential  property in Hyderabad  market.

Tracking the changed scenario, realtors acquired lands in probably the most sought-after locations in the town in the last quarter, and are now hopeful prices would see sustained uptick in the coming months.

Driving the positive sentiment one of the developers may be the upcoming Projects in Hyderabad of the metro rail project, and the political stability in the aftermath of bifurcation. The buoyant office market activity also offers helped regain the market momentum, starting from the past quarter of the last financial year.

He said developers were now “feeling comfortable” to raise prices while they expect sustained demand due to the low valuations here, in comparison to prices in other south metros.

He expects demand to outstrip supply in the Rs 3,000-4,000 per sft property segment as a majority of them lie along the metro rail corridor and enquiries have now been significantly higher over here. Overall, there could be around 20,000 new launches this financial year, he said.

 

However, developers are in “no rush” to launch new projects  and are backing up their plans with adequate bookings, in accordance with him.

Market consultant Cushman & Wakefield projects the town would see 45,000 residential launches next 36 months, with launches in the present fiscal to be around 14,000 units. Being truly a user-driven market, the projected supply was adequate, it said.

Consumer sentiment in the residential market took a strong beating due to prolonged uncertainty over the state bifurcation issue during 2010-2014. The period saw buyers holding back their buying plans and had remained on the sidelines on lack of clarity.

To kickstart demand during the lull phase (2010-14), developers here had offered discounts on unsold units, and many of them even postponed launches as prices weren't attractive.

“Buyers are clearly betting on the Hyderabad market whilst the rates listed here are 30-40 per cent below the similar offerings in Chennai and Bengaluru,”

t a recently held property show here, property developers said they received good enquiries for residential units priced in the number of Rs 45-75 lakh. "All of the consumers, who booked Luxury property in Hyderabad at the show were happy the values were low compared with other key metros in the south.