How Residential Sectors are benefitted from
REITs in Commercial Properties?
Over the last
year, the real estate investment trusts (REITs) have become the talk among various
sectors and other stakeholders of the Indian real estate market. What is meant
by REITs? How do they fare in the present sector? What will be their effect in
the realty domain of India? These are few of the questions that will be running
in the minds of common people who decided to buy home. Here in this
article we have discussed about the functioning of REITs and their significance
during property transaction. This is important to know for every investors and
property buyers in India.
REITs are a kind of investment tool in the
commercial property segment and are also known as the regular source of income
for the potential investors. With a proven record of success in all developed
countries, the REITS are projected to be introduced into the kingdom of Indian
property market in the coming future. But the noticeable thing is even many builders
were not aware of this trust.
A brief look on the REITs:
· They belong to the commercial property segment.
· The properties attracting real estate investment trusts are considered to be operational and revenue generating.
· A major portion of the earning is distributed among the investors of the asset.
·
REITs require fulfillment to the
corporate governance, financial reporting and information disclosure, said the
report from Live Mint.
Over the past decades, REITs has performed
successfully well in the major Indian real estate market like other developed
countries and recorded double digit expansion over a year. Furthermore, owning
to the authorization of terms to the sharing information and regulatory
framework, the real estate investment trusts, once
operational are expected to tempt professionalism and transparency in the real
estate sector of India. Moving forward, this trust is in the stage of
broadening the investments by attracting funds like insurance companies,
pensions and lots more. While cheering the novel sources of funding, this trust
is predicted to have an effect on the liquidity crunch in the Indian realty
sector. Though this tool is encouraging the commercial realty sector, it hasn’t
turned its attention towards residential
projects in Chennai.
So, it goes for a longer run so as to improve the performance of residential
and other sub regions. As expected, this trust will reinforce the investment
matrix of the commercial market and further encourage positivity to the power
of realty segment across the construction segment.
The commercial sector, residential segment and the retail are enjoying with increased funding and are emphasized as the venues of upcoming property constructions and further demand for more participation from the section of property developers in Chennai and investors. Over the past few years, the assets in major Indian cities such as Gurgaon, Noida, Bangalore and Mumbai have evolved to host the assimilation of all the sub regions. Hence, the effect beginning from the commercial segment is expected to raise substantially the residential segment. For instance, if you consider the location Chennai, the commercial parks that are spread out has involved in the expansion of real estate development in Chennai at prime localities of the city. Therefore, the introduction of REITs in India is expected to endorse the expansion of residential segment and energize the sector with the sources of investments in the nearby future with further growth. In short, residential segment is going to be benefitted from the introduction of REITs in the commercial sector.