Real estate investment counts as a milestone in anyone’s life. While housing continues to be the blue-eyed boy in the realty market, there is something else that every investor should gear up for in the coming times.
As the market is grappling with NBFC crisis and stalled projects, the Indian residential real estate segment is still one big mess. However, now that the prices have hit rock bottom and developers leaving no stone unturned to sell off the projects, this is definitely a nice time to invest in a housing property of your choice.
However, there is something else for which you should pace yourself as India is expected to witness the launch of its much-awaited first REIT listing this year. Large PE players have already acquired a portfolio of quality assets over the past 5-6 years in anticipation of a REIT listing.
In fact, Embassy Office Parks, a joint venture of US-based equity firm Blackstone Group and Embassy Group (an Indian real estate company) has already filed an offer document with SEBI for INR 5,000-crore REIT issue.
Here is why you should wait for REITs for your investment:
- Investors who find ticket sizes of commercial properties too steep can invest through REITs.
- REITs will operate like mutual funds for real estate and will allow investors with budgets as low as Rs. 2 lakh to invest in this thriving segment of real estate.
- Initially, the office sector is likely to dominate REIT listings closely followed by retail properties.
- REITs will improve the quality of the assets offered, thereby further attracting the attention of global players to invest in going forward.
- Going forward, developers are expected to also consider redevelopment of projects, especially in the retail and warehousing sectors by potentially listing those assets in future REIT listings.
Clearly, while housing will remain the top choice of investors, small ticket-size investment in REIT portfolios will take up a more central role in the near future.