An Insight into REITs and its Benefits

Last year marked a period of celebration for the real estate sector when the finance ministry cleared hurdles related to formation of Real Estate Investment Trust also known as REITs. This trust will largely benefit investors and builders. These trusts operate like mutual funds wherein one can invest in income-generating properties. In addition, the units can be traded in the same way as stocks since they are listed on exchanges.

Parksyde Homes - Nashik

Launch of REITs will open the gate for small developers owing to access to economical resources and also allow individuals to invest in small quantities in the realty market. A major advantage is that it will improve the liquidity status of developers whose projects are often stuck due to financial crunch. Furthermore, the large pool of resources put in REIT by different financiers will also aid builders in generating capital for new ventures. It will promote speedier monetisation of rented assets.

The opaque functioning of the real estate industry is not hidden from anybody. The REITs will accomplish an important task which is the need of the hour i.e. fighting corruption in various sectors and ensuring transparency in transactions. This will happen because of SEBI's involvement and regulations monitoring the program. As a result, all the people operating the trust, builders and investors will be bound by strict regulations related to financial disclosure. Therefore, this will make the entire realty funding procedure transparent and free of any illegitimate dealings. In addition, it could also encourage capital inflow from global companies.

As of now, it is expected that the price of 1 REIT unit could be around Rs. 1 lakh whereas the minimum subscription sum will be approximately Rs. 2 lakh. However, these amounts might gradually decrease once this program gets popular. REIT is a move welcomed by not just the management at Parksyde, but by real estate firms throughout the country.

Though there's no denying the fact that REIT will provide immense benefits to stakeholders and developers, the success of this program largely depends on the kind of regulations framed by SEBI. We are hoping for high dividends along with some tax reductions which will make the REITs fruitful and bring about a significant turnaround in the real estate sector. Parksyde has a variety of on-going projects in Nashik, but with the help of this trust and its ample resources, we can guarantee our patrons world-class houses and facilities.