It’s been some years since the Real Estate Investment Trusts (REITs) was established worldwide. However, it is a new concept in India. With the introduction of REITs in the world’s largest democracy, global real estate investors will now be allowed to invest in real estate and infrastructure in India.
In the coming year, Blackstone will tender its first issuance of these securities. It is seen as a development that could expand India’s real estate market. The United States started REITs in the 1960s, and today, they have become major source for investment in the US real estate. The securities offer stable dividend yields and investors special tax considerations. Other major countries like Australia, Singapore, the United Kingdom, Hong Kong and Japan, have also created their individual markets for REITs.
“While investors across the world have benefited from this $1.5 trillion market, the benefits they could bring to India will add legitimacy to the country’s realty investment market and its valuation,” said Deepak Talwar, Founder of DTA Associates.
Typically, majority of the Indians invest in real estate considering that asset is tangible and they see it as the safest mode of investment. The latest market research shows that home ownership stands at 87% in India. Though not directly comparable, it is quite higher than the percentage in the US, where home ownership accounts for 65%.
“It might be a short hop for the average Indian investor to start investing in the Indian REIT market, while the gains would be hefty,” real estate expert Deepak Talwar added.
Deepak Talwar believes that these investors can attain an ownership stake in real estate, which is proficiently managed by some of the world’s top investors and are valued, depending on property level analysis and universal principles.
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