Everything You need to Know about REIT Investment in India
Mar 28, 2019 Real Estate News
In 104, the government decided to launch REIT but back then it received a cold response from the market. This led to the government announcing several perks for the REIT investors.
Now the world largest alternative asset manager Blackstone Group along with its Indian partner Embassy Group has decided to launch India’s first public opening of REIT (Real Estate Investment Trust). The REIT opened on 18th March and took the investments till 20th March.
The group has already planned to raise Rs 4,750 crore from the REIT. Rs 876 crore of which has already been allocated to the strategic development.
REITs are the investment entities that will work similar to mutual funds. They will pool the money from the market and invest in the real estate project. Just like the mutual funds, the REIT is traded on the stock market. It is expected that the return in REIT will be much higher than the investment in mutual funds or any other investment area.
It is expected that the Embassy Office Park REIT will unlock a vast source of capital for Indian real estate developers from the global REIT industry, which according to the reports from Ernst and Young, stood at $1.9 trillion.
Under the REIT is registered one of the biggest marquee office space of 33 million sq. Foot. The tenant of the office space includes Microsoft, IBM, Rolls Royce and Google.
Investors should be aware of the fact that this is not an equity fund and the investor must hold it for a minimum of three years. Beyond three years, the capital gains can be taxed as long term capital gains while anything below the three year cap will be taxed as short term capital gain.
Now the world largest alternative asset manager Blackstone Group along with its Indian partner Embassy Group has decided to launch India’s first public opening of REIT (Real Estate Investment Trust). The REIT opened on 18th March and took the investments till 20th March.
The group has already planned to raise Rs 4,750 crore from the REIT. Rs 876 crore of which has already been allocated to the strategic development.
REITs are the investment entities that will work similar to mutual funds. They will pool the money from the market and invest in the real estate project. Just like the mutual funds, the REIT is traded on the stock market. It is expected that the return in REIT will be much higher than the investment in mutual funds or any other investment area.
It is expected that the Embassy Office Park REIT will unlock a vast source of capital for Indian real estate developers from the global REIT industry, which according to the reports from Ernst and Young, stood at $1.9 trillion.
Under the REIT is registered one of the biggest marquee office space of 33 million sq. Foot. The tenant of the office space includes Microsoft, IBM, Rolls Royce and Google.
How can one invest?
To invest in REIT, you need to have a DEMAT account. Fill the form and mention your DEMAT account number along with the code. The investors will have to bid for a minimum of 800 units, in the multiple of 400. To be listed on National Stock Exchange and Bombay Stock exchange, 25 percent of the issue will be available for non- institutional investor. The price band for investment is Rs 299 to 300, and the Embassy REIT will issue units aggregating to Rs 4,750 crore. The minimum amount of investment is Rs 2.4 Lacs.Investors should be aware of the fact that this is not an equity fund and the investor must hold it for a minimum of three years. Beyond three years, the capital gains can be taxed as long term capital gains while anything below the three year cap will be taxed as short term capital gain.
Better than a physical unit investment
In physical unit investment, you invest in one unit while in the REIT you invest in several units. The liquidity is also more in case of REITs as compared to the physical unit. The REITs anyways yield more profits as compared to the physical unit.Looking for property portal?
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