REIT, fractional ownership gaining momentum in commercial space
Real Estate

REIT, fractional ownership gaining momentum in commercial space

Indian REITs are primarily skewed toward IT-occupied assets. As the government prepares to disinvest in different classes of assets, these funds would gain more traction and REITs can become more broad-based, finds E Jayashree Kurup.

Commercial real estate is a popular segment for institutional investors owing to its tangible nature and steady returns. The current pandemic has opened gates to new technologies where the investors are adding real estate assets to their portfolios without the need of managing physical property. By allowing investors to own fractions of it, REIT has become an affordable option, further helping to mobilise money from many retail investors. 


A fractional model or REIT allows investors to invest in premium commercial properties and earn a monthly rental yield. Through REIT, buyers can now manage and sell income-generating assets on an entirely online platform through a fractional investment model. Such properties can generate good rental yields besides offering an extremely promising appreciation. 
 
The demand in the Indian real estate sector has always been outpacing the supply, especially in urban cities. REIT investments are witnessing a surge, especially in metro cities with IT professionals, which are mostly 85-95% tenanted, and even during the pandemic there were no significant exits from these properties. Since most of these are integrated complexes, the F&B outlets, food courts, and hotels in the complexes also contribute to the monthly income. 
 
Any domestic, foreign, retail, or institutional investor can purchase REIT units. One can buy shares of REITs like any other shares on the stock exchange, through demat accounts and the buying and selling can be done on NSE or BSE, upon listing. To sum up, REITs or fractional investments are lucrative as they can generate good rental yield if planned wisely. 
          

Click here to read more

Indian REITs are primarily skewed toward IT-occupied assets. As the government prepares to disinvest in different classes of assets, these funds would gain more traction and REITs can become more broad-based, finds E Jayashree Kurup. Commercial real estate is a popular segment for institutional investors owing to its tangible nature and steady returns. The current pandemic has opened gates to new technologies where the investors are adding real estate assets to their portfolios without the need of managing physical property. By allowing investors to own fractions of it, REIT has become an affordable option, further helping to mobilise money from many retail investors. A fractional model or REIT allows investors to invest in premium commercial properties and earn a monthly rental yield. Through REIT, buyers can now manage and sell income-generating assets on an entirely online platform through a fractional investment model. Such properties can generate good rental yields besides offering an extremely promising appreciation.  The demand in the Indian real estate sector has always been outpacing the supply, especially in urban cities. REIT investments are witnessing a surge, especially in metro cities with IT professionals, which are mostly 85-95% tenanted, and even during the pandemic there were no significant exits from these properties. Since most of these are integrated complexes, the F&B outlets, food courts, and hotels in the complexes also contribute to the monthly income.  Any domestic, foreign, retail, or institutional investor can purchase REIT units. One can buy shares of REITs like any other shares on the stock exchange, through demat accounts and the buying and selling can be done on NSE or BSE, upon listing. To sum up, REITs or fractional investments are lucrative as they can generate good rental yield if planned wisely.           Click here to read more

Next Story
Real Estate

Pecan Realty Completes Rs 1.5 Billion Transactions

Pecan Realty has recently completed four institutional transactions worth over Rs 1.5 billion over the past two years, strengthening its position as an execution-led real estate platform. The deals include resolution-led acquisitions, structured finance transactions and capital partnerships across its development portfolio.The transactions covered acquisitions through the National Company Law Tribunal process and helped provide repayment or exits to both private and public sector lenders. The company said the deals demonstrate its ability to resolve complex project situations, work with instit..

Next Story
Real Estate

SNN Estates Expands North Bengaluru Housing Project

SNN Estates has announced an expansion of its SNN Estates Felicity residential project in North Bengaluru following strong buyer demand, with 75 per cent of the first-phase inventory sold within three days of launch.The developer will add 76 apartments in the new phase, taking the project's estimated revenue potential to around Rs 1,000 crore upon completion of Phase 2.Spread across 6.5 acres in Rachenahalli, near Manyata Tech Park, the project comprises 604 apartments in 1.5, 2, 2.5, 3 and 4 BHK configurations. The development includes a 50,000-sq-ft clubhouse with amenities such as sports co..

Next Story
Infrastructure Urban

SCG Drives ASEAN Industrial Transformation Strategy

SCG is strengthening its focus on ASEAN as a key growth region by advancing industrial transformation, enhancing competitiveness and building resilient regional value chains. Thammasak Sethaudom, President and Chief Executive Officer, SCG, highlighted the need for industries to continuously develop capabilities, strengthen resilience and deepen regional cooperation to achieve sustainable long-term growth.SCG views ASEAN as an important growth engine alongside China, supported by favourable demographics, trade connectivity and investment flows. With ASEAN’s GDP projected to grow by around 4.7..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement