REAL ESTATE NEWS
|
It's Rocking...Real Estate!
|
The total market for real estate in India is estimated at $14 billion and is growing at the rate of 30%; by ‘15, it is expected to touch $90 billion. In developed markets, individual investors have an option to invest in real estate through real estate mutual funds or real estate investment trusts.
The potential for large returns has led to a large number of institutions floating real estate venture capital funds in the market. This has been helped by increase in the number of organized developers and increased transparency in the sector.
Venture capital funds approved by the Securities and Exchange Board of India (Sebi) invest in equity and equity-linked instruments of companies engaged in real estate.
These schemes typically used to target either institutional investors or high net worth individuals.
However, as the markets have developed, the minimum limit of investments into these funds has decreased significantly from Rs 2-4 crore to as low as Rs 25 lakh of late, making it available to a large cross-section of investors.
Why realty fund?
Investing in a real estate fund, compared to investing directly in real estate property, has the following advantages:
Investment at early stage: Since the costs are much lower at the early stage of development, the returns are more attractive.
Benefit of diversification: The fund invests the corpus across a range of projects and cities, resulting in lowering of the overall risk.
Exposure to a broad range of options: By investing in a fund, an investor can obtain exposure to a broad range of investment options, which may not have been available to an individual investor; for example, investment in a shopping mall, commercial properties, etc.
Professional expertise: A fund has the advantage of professional managers and research from various sources.
Real estate fund are generally close-ended. Sebi dictates that a venture capital fund should invest two-thirds of its entire corpus in equity instruments of unlisted companies. The funds do not own the property itself - rather, they typically invest in the equity or equity-linked investments of specific real estate projects. These investments are done at an early stage of a real estate project.
Source: The Economic Times, Nikunj Kedia
|
|
Next |
| |
| Back to Archives |
Back to Top |
|
|
 |
View
our collection of our news articles and company events.
|
| Our archive provides you with information
on all our company news, events and happenings. |
|
|
