QuestionsCategory: PAN IndiaWhat is REIT ?
Ajay asked 2 years ago

REIT or Real Estate Investment Trust can be described as a separate business entity/Company/ Institution or a Trust, which is entrusted by the investors to put their money in to profit generating Real estate venture. It may also be described as a business designed to channelized the investible funds into operating, possessing or financing the profit worthy property. To understand REITs, mutual funds would be the best model to compare it with. As REIT’s are modeled around the lines of mutual funds where an investor, whether big or small, can invest in big projects with complete liquidity and gets the proportionate share of returns with other mutual investors through a common fund. Same ways, in REIT, investors can reap profit along with the long term capital appreciation by having invested in very liquid method of getting a stake in tangible estate. Like every other security, REITs can also be enlisted in stock market…

In India, real estate Investment Trusts were created by the Securities and Exchange Board Of India (SEBI) in 2007. But the concept is not new to the world. First REIT was created in U.S. in the year 1960 though the first REIT was listed in 1965 in New York Stock Exchange Soon the concept of REIT started to found acceptance in the stock exchanges of Europe, Australia & Japan too. The investments watchdog only launched draft rules which because of certain restrictions were later declined. In September, 2013, SEBI arrived on the scene with modified rules for REITs, that have been approved on September 26, 2014.
REITs have numerous advantages of interested traders or investors. It possesses a regular earnings streamlined together with reduced portfolio unpredictability and higher returns and wealth accumulation. Consequently from it as being a listed entity, it’s bought and offered effortlessly supplying great liquidity. It’s a natural hedge against inflation as returns consistently outpace the Consumer Cost Inflation.
There are mainly two kinds of REITs – equity and mortgage. Investment Trusts are very advantageous to add mass to an economy because they allow dormant investable funds to become directed into infrastructure projects for example group housing projects, Townships, Plotted Housing schemes, hospitals, schools and so forth

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1 Answers
Sonakshi Batra answered 4 days ago

REIT Real Estate Investment Trusts, are basically real estate companies that finance income producing real estate in a range of property market. The REIT gives investors the profit of real estate property investment addition to benefit of investing in publicly traded stock.

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