Effect of REIT on Indian Malls | YRC

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10/5/2017
Effect of REIT on Indian Malls YRC Your
Retail Coach
E"ect of REIT on Indian Malls YRC Sep 1, 2017
REIT, which stands for Real Estate Investment
Trust, is a type of company that invests in real
estate in the form of ownership and financing of
various income- generating real estate
properties like o ce buildings, apartment
complexes, warehouses, timberland, shopping
malls, hotels etc. REITs can be private, public
or public non-listed. However, stocks of most
REITs are traded on major stock exchanges. Even
common people can invest in the portfolio of
real estate properties by purchasing the shares
or stocks of REITs. In return, these
stockholders/investors benefit from the dividends
and capital appreciation of the properties
involved. (1) REIT in India The government has
already introduced several reform initiatives in
the regulatory framework for REIT. Through
REITs, small investors will be able to invest in
the lucrative real estate sector of India. The
value of total REIT listing is expected to go
over one trillion INR. REITs are expected to
attract both retail and Minesstsitaugtieounsal
investors in the real estate sector. (2)
http//www.yourretailcoach.in/blog/effect-of-reit-
on-indian-malls/
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Effect of REIT on Indian Malls YRC Your
Retail Coach Through REITs, small investors will
be able to invest in the lucrative real estate
sector of India
10/5/2017
E"ect of REIT on Indian malls Lakhs of small
investors who otherwise cannot a"ord to make huge
investments in the real estate sector will now
have the access and suitability to invest in the
real estate business of shopping malls through
REITs. With a larger and wider investor base
which is likely to improve the quantum of
funding, REITs can play an instrumental role in
the development of better and advanced malls with
their investments in better infrastructure,
designer architecture and sophisticated
engineering technologies.
Lakhs of small investors who otherwise cannot
a"ord to make huge investments in the real
estate sector will now have the access and
suitability to invest in the real estate
business of shopping malls through REITs
Builders and developers invest a considerable
amount of money in the real estate projects like
shopping malls. Reaching the break even and
generating a healthy ROI may take years for
these builders and developers who often find
their investments in real estate locked up for
years or generating returns at a very slow rate.
REIT can overcome this concern by providing an
exit route to these developers. This can serve
as a motivator for more builders and developers
to engage in real estate projects like shopping
malls.
Reaching the break even and generating a healthy
ROI may take years for these builders and
developers who often find their investments in
real estate locked up for years or generating
returns at a very slow rate
REITs have the potential to address the
demand-supply deficit of shopping malls in India
both in terms of quality and quantity. It is
believed that of all the shopping malls
operating in India, only about 15 of them are of
superior quality. Only 50 of the demand for the
total area requirement for shopping malls across
the country is fulfilled every year. By
providing a platform to invest in real estate to
a wide base of retail investors and to all
categories of institutional investors, REITs has
the potential to generate the necessary funding
and the interest on the part of builders and
developers, required to balance the demand and
supply of shopping malls. (3) Message us
http//www.yourretailcoach.in/blog/effect-of-reit-
on-indian-malls/
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Effect of REIT on Indian Malls YRC Your
Retail Coach By providing a platform to invest in
real estate to a wide base of retail investors
and to all categories of institutional
investors, REITs has the potential to generate
the necessary funding and the interest on the
part of builders and developers, required to
balance the demand and supply of shopping malls
10/5/2017
Properties like shopping malls owned by REITs
will have to follow more stringent protocols as
they will come under public scrutiny to protect
the interests of the investors, customers and
other stakeholders involved. The compliance
burden will increase for real estate
companies. REIT platform can prove to be the
financial turbine necessary for the development
and upliftment of the shopping malls in India.
By paving the way to the small investors base,
by providing an exit route to the builders and
developers, by attracting the long- term
institutional investors and by providing the
much-needed investment platform for real estate
companies, REITs are all set to change the face
of shopping malls in India. Disclaimer The above
content/publication is only a general overview
and is not to be used as a basis for the
exercise of professional judgment. Readers are
advised to go through the laws and regulations
pertaining to REIT.
Author Bio Rupal Agarwal Chief Strategy O cer
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10/5/2017
Effect of REIT on Indian Malls YRC Your
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