SEBI will soon introduce the Real Estate Mutual Funds (REMFs) as close ended units which would be listed on the bourses. These REMFs are globally known as Real Estate Investment Trusts (REITs). REITs in India will improve access to stable, global and competitively priced capital, as well as lead to stronger and more professional property businesses.
The essential difference between a REIT and a mutual fund is that investments made in REIT are traded in real estate stocks and not invested in stocks of companies. REITs offer a heavier liquidity than Mutual Funds. Mutual Funds are trusts that mobilize and pool in resources from investors with the common objective of investing in specified markets - equity or fixed income.
REITs can help bring transparency and efficiency to the sector and also help attract foreign capital seeking commercial property opportunities in India and elsewhere. It will also make builders stick to quality projects and also reduce sub-standard construction practices.
Real estate funds in India:
The government has permitted foreign direct investment in India in real estate. Many domestic venture funds have been set up. Realty funds in India also include those that are devoted to property development, investment in malls etc.
Prominent companies promoting realty funds in India include HDFC Property Fund, DHFL Venture Capital Fund, Kotak Mahindra Realty Fund, ICICI’s real estate fund, and HDFC India Real Estate Fund (HI-REF).
Some of the international companies aggressively investing in the sector are Carlyle, Blackstone, Morgan Stanley and Warbus Pincus.
Amitabh Kumar, a writer by profession has been part of content research team of magazines, journal dealing with NRI, non resident Indian news, stories, and issues. Presently he is content writer in website - http://www.nrirealtynews.com emphasizing on REITs in India , property investment scenario in India.
