REITs Coming to India? by Gulf News
Private equity in Indian real estate is on the rise, according to a recent Gulf News article. “An optimistic economic scenario and a booming property sector have investors queing up for a slice of the market,” reports Aruna Rathod in the April 29 article. The author goes on to predict that real estate investment trusts (REITs), which don’t yet exist in India, will be introduced there by mid-2014.
“The Indian real estate sector has seen a flood of foreign funds,” the article continues. “With the rupee depreciating considerably in a short span of time and commercial properties especially being available at attractive costs, foreign investment through the private equity route witnessed more than a 40 per cent jump in 2013 over previous years.”
While investors already can participate in large-scale Indian real estate projects by purchasing realty stocks, the flood of funds is expected to grow even more when the Securities and Exchange Board of India (SEBI) begins allowing them. (SEBI already has issued a notification to introduce REITs.)
REITs will be attractive both to foreign investors and to nonresident Indians, who are beginning to recognize that real estate in their homeland is appreciating much more rapidly than property elsewhere.
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