Need Of REIT & It’s Prospective Implication In India [ READ ]
Ajinkya .A. Jagtap
A Real Estate Investment Trust is a company which modelled after mutual fund that owns or finances income-producing real estate. It provides investors regular income streams, long-term capital appreciation and diversification. REITs typically distribute all of their taxable income as dividends to shareholders. On those dividends shareholders pay the income taxes. REITs are strong income vehicles because REITs must pay out at least 90 percent of their taxable income in the form of dividends to shareholders .Office buildings, hotels, shopping malls, apartments, resorts, warehouses, self-storage facilities and mortgages or loans are the income producing real estate assets of REITS.India has also tried to establish REIT. Mainly due to global slowdown and resultant impact on the property markets in India the earlier attempts to introduce REITs in India did not succeed. The other aspect is mortgage backed securities which is not permitted to invest, resulted real estate market opportunities shrinkage. However, SEBI announced the draft consultation paper on Real Estate Investment Trust (REIT) Regulations on October 10, 2013. Earlier in 2008, SEBI had issued certain draft regulations for introducing REITs. I-REITs (REITs in India) will invest in completed rent generating properties in India (to comprise minimum 90% of net asset value) and mortgage backed securities, would issue securities, which would be listed on stock exchanges and. In earlier phase I-REITs are planned to be available only to high net worth individuals and institutions to develop the market but now there are some relaxations introduced.
Ajinkya .A. Jagtap
A Real Estate Investment Trust is a company which modelled after mutual fund that owns or finances income-producing real estate. It provides investors regular income streams, long-term capital appreciation and diversification. REITs typically distribute all of their taxable income as dividends to shareholders. On those dividends shareholders pay the income taxes. REITs are strong income vehicles because REITs must pay out at least 90 percent of their taxable income in the form of dividends to shareholders .Office buildings, hotels, shopping malls, apartments, resorts, warehouses, self-storage facilities and mortgages or loans are the income producing real estate assets of REITS.India has also tried to establish REIT. Mainly due to global slowdown and resultant impact on the property markets in India the earlier attempts to introduce REITs in India did not succeed. The other aspect is mortgage backed securities which is not permitted to invest, resulted real estate market opportunities shrinkage. However, SEBI announced the draft consultation paper on Real Estate Investment Trust (REIT) Regulations on October 10, 2013. Earlier in 2008, SEBI had issued certain draft regulations for introducing REITs. I-REITs (REITs in India) will invest in completed rent generating properties in India (to comprise minimum 90% of net asset value) and mortgage backed securities, would issue securities, which would be listed on stock exchanges and. In earlier phase I-REITs are planned to be available only to high net worth individuals and institutions to develop the market but now there are some relaxations introduced.
