On October 10, Securities and Exchange board of India (Sebi) released consultative guidelines for the operation of REIT, five years after delivering its first draft on the subject, in 2008.
Currently, individuals either have to invest in property directly, or through closed ended funds with a minimum transaction size of Rs. 1crore. With REIT you could invest with small sums, receiving proportional returns.
Once the Real Estate Investment Trusts come into effect, individuals can invest in property funds even with small sums of money.
NEW DELHI: India’s eight major cities saw launch of 1.32 lakh homes during January-September 2013, up by five per cent from the year-ago period, according to global real estate consultant Cushman & Wakefield.
These eight cities — Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, NCR and Pune — had witnessed launch of 125,590 residential units during the corresponding period of 2012.
As many as 31,434 units were launched in affordable segment, while 75,529 and 24,032 homes were introduced in the middle-income and high-end segments, respectively. Nearly 1,100 luxury homes were also launched.
For many owning a house is a dream that calls for a strict financial discipline, as the loan repayment tenure ranges from 10 years to 25 years. Housing, a basic need, also enables access to credit market by working as collateral/security.
A report by real estate services firm, Cushman & Wakefield, this month said the estimated demand for office space across the top eight Indian cities during 2013-2017 is expected to be 132 million sq ft (msf). The supply of new office space during the same period expected to be approximately 143 msf of which approximately 90 msf is under construction and expected to be completed by 2015.
“With economy expecting more stability in the post election phase from 2015, the absorption is expected to pick pace in Bengaluru, Mumbai and NCR. We expect growth to set in from the second half of 2014 when an increase in leasing activities both on account of entry of new companies, expansion of existing companies and relocation and consolidation activities that are expected to continue,” said Sanjay Dutt, executive managing director, South Asia, Cushman & Wakefield, in the report.
On 10 October 2013, the Securities and Exchange Board of India (Sebi) issued a consultation paper on draft Real Estate Investment Trusts (REITs) Regulations, 2013. Once it has received feedback from the public, the regulator will come out with the final regulations on REITs. Thus, it appears that after a long wait REITs may finally start operating in India soon.
Asset allocation requires rebalancing, which means that every six months or so, you sell a part of the asset class that has outperformed and buy more of the asset class that has under-performed. At present it is impossible to apply the asset allocation strategy to real estate. Suppose you buy a second house for investment. Since the ticket size is large, in case of most investors the house comes to occupy an overwhelmingly large portion of their investment portfolio.
Mumbai, has recorded a rise of 16 % in the registration of properties in the year 2013, when compared to the data for the first six months of 2012. Reporting the figures for the same period in the year 2013. There has been a multifold increase in the number of properties being sanctioned in the first two quarters of this year as compared to the figures recorded during last year. Another prominent push for the growth in sales of homes has come from the easy and lucrative schemes offered by the developers. Schemes like the subvention plan has lured the home aspirers to cash upon easy payment options that requires not more than 20% of the net value of the property to be paid up-front.
MUMBAI: Bullish on the revival of the economy after general elections, real estate consultancy firm Cushman & Wakefield expects nearly 132 million sqft of office space, across the eight major metros, to get absorbed by 2017.
The supply of office space between 2013 and 2017 in the top eight cities-Delhi-NCR, Mumbai, Bangalore, Chennai, Hyderabad, Ahmedabad, Kolkata, and Pune is expected to be around 143 million sqft.
Of this 143 million sqft, around 90 million sqft are currently under various stages construction and is expected to get completed by 2015, the report said.
To give a boost to real estate and construction, the government plans to issue guidelines for state on streamlining approval procedures for development projects. The guidelines will incorporate recommendations and key findings of the committee on streamlining approval procedures for real estate projects that was set up by the housing ministry.
The trend of buying ‘second’ homes or weekend getaways in Mumbai’s peripheral areas and beyond has been gaining ground in recent years. With rising real estate prices in the prime areas, second home provides a good opportunity for investment.
Moreover, many second home destination have evolved and transformed into first home destinations, making the scope for returns on investment even higher.