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