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Saturday, June 25, 2016
Policy amendments on REITs beneficial
Jun 25, 2016: The latest policy announcements made by the government has positioned India as one of the most open economies. The various announcements convey the government’s commitment to reforms and to making India a lucrative investment destination for corporates across the globe. With these structural shifts, apart from generating new employment opportunities, the country is here to witness rapid infrastructure development in the near future.
The measures announced by the government regarding FDI as well as Real Estate Investment Trusts (REITs) will facilitate investments into the country. Higher investment volumes are likely to result in greater inflow of foreign investments and encourage domestic players in sectors such as manufacturing with cutting edge technology, civil and defence aviation, food processing and retail, says Anshuman Magazine, chairman and managing director, CBRE, South Asia Pvt Ltd. The growth of these sectors will directly benefit the real estate market in India, especially office, retail, logistics and warehousing segments, among others.
With regard to REITs, the changes proposed by the Securities and Exchange Board of India (SEBI) are clearly indicative of the eagerness to allow investments in REITs on a priority basis. The announcement to allow 20% investment in under-construction projects is likely to lead to an increase in potential yield returns, necessary for a successful REIT listing in the country, he says.
Overall, these announcements by the government are a much needed step in the direction of boosting the overall economy of the country