Finally, after the long wait, SEBI lays the foundation stone for Real Estate Mutual Funds in India. Though real estate funds were available to HNIs through private equity funds, now even small retail investors can invest in property through Real Estate Mutual Funds.
These funds shall be close-ended with units listed on stock exchanges, the Securities and Exchange Board of India (SEBI) said and the net asset values of the funds must be made public every day.
Such schemes shall invest at least 35 percent of their funds directly in real estate assets and the rest in mortgage-backed securities and instruments of firms engaged in the sector, it added.
They can invest up to 25 percent of their corpus in other securities, according to the statement.
"Taken together, investments in real estate assets, real estate-related securities... shall not be less than 75 percent of the net assets of the scheme," SEBI said. The asset managers should get the assets valued every 90 days.
- Opportunity to benefit from Real Estate Boom without investing huge sums
- Good diversification opportunity in such a volatile market
- If you invest in real estate just for investment, then this is going to be real hassle-free. No huge paper work, registration, broker charges, chances if fraud or your house being declared on illegal land or forest land ;)
Something to worry about...
- Return might not be as good as real estate due to percentages of investments
- Closed ended!
- No experience or past performance to refer to
Kindly post your views on the same as comments...
Posts
1 comments:
REIT or real estate mutual funds are the mutual funds essentially devised to invest money in real estate schemes. These are exempted from taxes and they pass on maximum (90% is recommended in India) returns to the retail investor. As real estate melodies are expected to top the Indian chart for a decade or more, REIT is going to sell like hot-cakes. Some of the plus and minus of the existing REITs around the world are enumerated below. In the United States real estate investment is through Real Estate Investment Trusts (REITs). REITs are formed as companies that have an issued share capital. Further, they have the flexibility to raise funds through preference shares and debt. In this structure, they are always close-ended and listed on the exchanges. More than two years after the idea of real estate mutual funds was mooted in India, stock market regulator SEBI finally gave its blessing to fund houses looking to launch this product. Under the guidelines announced by SEBI, all existing mutual funds will be eligible to launch real estate schemes, but a corporate looking to launch such a product will have to show proof of five years experience in the real estate business. The decision of the market regulator SEBI to allow real estate funds at stock exchanges would soon benefits from exponential growth in the real estate market within the reach of retail investors even if they are not able to buy homes or commercial properties at the prevailing sky-rocketing prices.For more view- realtydigest.blogspot.com
Post a Comment