REIT or Real Estate Investment Trust is the organization that owns, operates and manages real estate commercial properties. It also manages mortgages. REIT manager various types of commercial properties like shopping centers, office buildings, hotels, restaurants, warehouses and so on.
In the year 2014, Indian government approved the creation of REIT to help the investors in inter est-owning and fast investment liquidation which is not common phenomenon in the Real Estate sector. Efforts are made to make real estate investing procedure simpler than it used to be earlier using direct national investment and indirectly by foreign direct investment( through mutual funds and listings). In the 2014’s Indian budget, honorable finance minister Arun Jaitley planned to set up some laws and amendments for the sake of introducing REITs.
According to REITS, following features will be introduced-
- With REITs, even the low budget investors will be able to make safe and satisfying investments in the Indian real estate sector.
- The real estate investors can start with investments as low as a sum of 2 lakhs.
- The REIT platform is SEBI approved, and has plans to pool money from the all the leading investors across India that would be contributed in REIT funds. The funds will be further invested in commercial properties to get interest.
- More than 80% of properties must be invested in completed and revenue-earning projects, and 20% can be invested in projects that are under construction. This would help in lowering the risk.
- The organization will display the full valuation on per annum basis, and provide updates on half-yearly basis. This will help maintaining transparency.
REIT aims to provide investors the monitory benefits in the form of dividends acquired from the selling of commercial properties. The organization has plans to invest 90% of the income to the investors and fund them for some good investments they would intend to make.
If the REIT functions according to the plans, it will help and empower real estate investors that would indirectly help consumers getting sustainable and ergonomic commercial & residential properties in reasonable prices.