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Real Estate Investment Trust (REIT).pptx

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Real Estate Investment Trust (REIT).pptx

  1. 1. Real Estate Investment Trust (REIT) PRESENTED BY – SIDDHI JAIN
  2. 2. WHAT DOES IT MEAN? WHAT DOES IT DO? Easy way to understand about REITS is to compare it with the example of mutual fund. mutual fund is for equities what real estate investment trust or REITS are to real estate.
  3. 3. INVESTORS INVEST Rs10,000, Rs50,000 into different categories of mutual funds. So we'll buy certain plans from LIC Mutual Fund or HDFC mutual Fund ETC. mutual fund managers They will go and buy a bunch of different stocks depending on the type of mutual fund in which you have invested. A SPECIAL BRIEFCASE NOW LISTEN CLOSELY!
  4. 4. SAME GOES FOR REIT!
  5. 5. Why do we need REITs in the first place? • Can't we just directly go and buy commercial properties or plots or agricultural land, bunch of different types of real estate? YESYOU CAN BUT! •It might cost you a lot of money. TRADITIONAL WAY (TICKET SIZE) • TRUE Fractional ownership. REIT
  6. 6. THIS IS ALL REIT! MY FUNDS HOUSE OFFICE PLOT BUILDING
  7. 7. REITS MARKET STATUS IN INDIA  So the REITS market in India is very new and recent.  It has just started eight years ago.  So if you compare it to other REITS market across the world so you can see that in the US.  The introduction of REITs happened in 1960.  They have a fairly big and mature real estate investment trust market.  They're almost 96% of real estate is owned through REITS in US.  Opposite is the situation that only 17% of the real estate in India is owned through REITS.  Rest 83% of the market is somewhat unorganized
  8. 8. SOME REALLY IMPORTANT POINTS ! • This is a new instrument There are a lot of uncertainties associated with it. • As per CB regulation, 80% of the money needs to be invested via the REITS company into developed projects. Rest 20% of the money can go to risky assets or risky real estate assets. debt to equity is 50% or more than 50% slightly risky investment from this particular perspective if tomorrow economy stalls for another ten years then these companies might not be able to service their debt. high debt nature DEBT ORIENTED
  9. 9. So, How are we making Profit? SHARE PRICE PROFIT! DIVIDEND YIELD Embassy office Park REIT MINDSPACE BUSINESS BROOKFIELD INDIA lead investing options in India.
  10. 10. ADVANTAGES INFLATION! STILL BETTER RETURN! PARTICIPATION IN COMMERCIAL REAL ESTATE ECONOMY LOW COST
  11. 11. DISADVANTAGES HIGH COMMISION HIGH DEBT GAME IMMATURE MARKET
  12. 12. WHAT ARE MY VIEWS? STILL, I want to invest in the real estate market. What should I be doing?
  13. 13. Let the market mature a little bit and then you can make a call. Whether investing in REITs or not? investing in REITS would make more sense. In case you are interested in buying residential properties. For now! If you can buy a commercial real estate in tier two, tier three cities, that could be a much Prudent financial decision.. MY OPINION

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