Construction Industry News
Commercial real estate is a popular segment for institutional investors because of its tangible nature and stable returns. The current pandemic has opened gates to new technologies where the investors add real estate to their portfolios without having to manage physical property. By allowing investors to own some of it, REIT has become an affordable option, further helping to mobilize money from many private investors.
A fractional model, or REIT, allows investors to invest in prime commercial real estate and earn a monthly rental yield. Through REIT, buyers can now manage and sell income-generating assets on a fully online platform through a fractional investment model. In addition to a very promising valuation, such properties can also provide a good rental yield.
Demand in the Indian real estate sector has always outpaced supply, especially in urban cities. REIT investments are witnessing a surge, especially in metro cities with IT professionals, who are typically 85-95% leased, 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, private or institutional investor can purchase REIT units. One can buy shares of REITs like any other stock on the exchange, through demat accounts and the buying and selling can be done on NSE or BSE, after listing. In short, REITs or fractional investments are lucrative because they can generate good rental returns if planned wisely.
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