REITs Funds: Invest in Real Estate without Buying Real Estate

REITs Funds Invest in Real Estate without Buying Real Estate

REITs Funds: Regulated by SEBI, REITs are companies that function, own or finance revenue generating commercial real estate. Combining the capital of several small investors, REITs make it possible for them to earn dividends from office property investments. Therefore, investors can earn dividends without the hassle of buying or managing any real estate directly. 

Buying a house, property, or real estate is seen as one of the safest investment options that give significant returns over time. However, not everyone is financially capable or willing to commit to a property by paying a huge amount of money. This is where Real Estate Investment Trusts (REITs) come into the picture. 

According to the NSE website, REITs, since their inception in August 2007, have shown a negative return of 4.75 per cent. However, the last 365 days have shown significant growth for REITs. The NSE Realty Index has given an average return of 41.32 per cent from 365 days and 13.95 per cent from 30 days.

In fact, According to NSE, the Realty sector has done way better than automobiles, FMCG and certainly financial services, and more.

The REIT is a fund focused on the purpose of operating, owning and financing income-producing properties. REIT investments offer liquidity, unlike investments in buying real estate, similar to mutual funds. 

Here’s what experts have to say about REITs

Ravi Singh, Vice President and Head of Research, Share India Securities, said, “Realty sector seems attractive in the long run, well supported by the government policies and infrastructure boost. The sector may give a return of 16-18% per cent in a year horizon. Godrej Properties, Oberoi Realty, DLF, NBCC, Macrotech Developer and Prestige Estate are stocks which investors may include in their portfolio for good returns.”

“Real estate and stock investment comes with different risks and opportunities. Real estate are considered to be less liquid as compared to stocks and require big investment, although, it offers the potential of substantial appreciation. It’s always wise to invest in realty stocks to get an early return and an opportunity to invest in a bouquet of realty companies,” he added.

According to NSE Website, Godrej Properties have given an average return of approximately 21 per cent, and Oberoi Realty gave an average return of around 71 per cent in the last 12 months. 

Uddhav Poddar, MD of Bhumika Group, said, “REIT funds are felicitous for long term investment opportunities. It is much more plausible for retail investors to invest in A Grade Rent Yielding Assets through REIT funds, the availability of which in other cases is absent for small investors. REIT funds help in monetising the real estate assets, which is highly beneficial as the focus of the companies turns towards the execution of realty projects rather than its ownership. The demand for real estate investments is back to where it was, and its positive aftereffect will be seen in the results of the listed real estate companies. There are also high probabilities of many real estate companies that would go in for listing in the next 12-18 months.”

Source : Zee biz

Related Posts

Realty developer DLF will develop 850,000 sq ft of low rise independent floors at DLF5, Gurugram, with the total revenue...
Surging interest in luxury housing has been one of the most remarkable developments in the post-pandemic world. From the need...

This website is in the process of being updated. by accessing this website, the viewer confirms that the information including brochures and marketing collaterals on this website are solely for informational purposes only and the viewer has not relied on this information for making any booking/purchase in any project of the company. Nothing on this website, constitutes advertising, marketing, booking, selling or an offer for sale, or invitation to purchase a unit in any project by the company. The company is not liable for any consequence of any action taken by the viewer relying on such material/ information on this website.

All trademarks, logos, and names are properties of their respective owners. All Rights Reserved.Ⓒ Copyright 2020-22  © Property in Gurugram  Blog

ENQUIRE NOW

NO BROKERAGE | BEST DEAL Guaranteed

ENQUIRE NOW