INSUBCONTINENT EXCLUSIVE:
a domain of the privileged few
However, they are now being shaped by the growing resilience and aspirations of the middle class
The creation of wealth has become a priority for both the individual and the nation
Rising disposable incomes along with better financial awareness and hunger for smarter investments are driving this transformation
While India adds nearly three people to the ultra-high net worth bracket every day, the growing middle class (expected to reach one billion
by 2030) is now beginning to participate in opportunities traditionally accessed by institutional grade real estate investors.In the past,
Now, the Real Estate Investment Trust (REIT) structures are democratizing investment in commercial real estate by making it accessible to
even those with modest amounts to invest and converting an exclusive wealth building asset class into an inclusive one.A REIT is a company
that owns and operates income-generating real estate assets such as offices and malls, and must pay out 90% of cash flows semi-annually, and
have 80% of their portfolios invested in rent generating assets.REITs allow individuals to buy units on the stock exchange, enabling them to
invest in large-scale commercial real estate without having to directly own or manage properties.
Live EventsWhy it is more urgent now than
moderate salary growth, and the impact of inflation on long-term savings
aspirations of an increasingly financially aware and upwardly mobile generation
Direct ownership in real estate, though attractive, often remains out of reach of many due to high entry costs, illiquidity, and regulatory
This is where the opportunity lies, for capital and innovation to come together and open up newer, safer, more accessible and liquid
In historical terms, income-generating commercial real estate (CRE) was generally the preserve of institutional and also ultra-wealthy
estate assets like malls, hotels, warehouses etc
potential of commercial real estate.Unlike traditional fixed deposits (FDs), REITs offer a more attractive combination of higher returns,
regular income through distributions, capital appreciation, and liquidity, while still maintaining a strong safety profile.For middle-class
investors seeking a balance between stability and growth, REITs present an ideal entry point into modern investment options
They combine the reassurance of tangible assets with the flexibility and diversification typically associated with financial instruments,
aligning well with the evolving financial goals of middle-income households.Five lesser-known benefits of REITsProtection against Inflation:
REIT leases have built-in rental escalations (typically 5% annually) providing a powerful hedge against inflation over timeTax efficiency:
REITs are highly tax-efficient, as they avoid double taxation at the corporate level and the dividend component of the distributions is
tax-free in the hands of investors.Governance: REITs are governed under strict SEBI Regulations
The governance includes independent trustees, ring-fencing assets, ceiling on debt levels, investment only in rent generating assets,
distribution of 90% of income and various other regulations regarding Related Party Transactions, investments, disclosures etc, making REITs
a highly secure product.SIP: REITs also allow investments through Systematic Investment Plans (SIPs) on various platforms, helping investors
build wealth over time through regular contributions and the benefits of rupee-cost averagingUrbane Growth Market Investments: REITs will
by Global Capability Centers), and retail (spurred by rising consumption)As India moves towards becoming a $5 trillion economy, financial
In this context, REITs are not just another investment vehicle, they are enablers of economic empowerment
Indians looking to move beyond FDs and fixed-income instruments, they are fast becoming the smarter, safer, and more sustainable choice for
suggestions, views and opinions given by the experts are their own
These do not represent the views of the Economic Times)
