Your browser version is 8.0 and the minimum required version for this
website is 9.0 So please use IE 9+.
click here to upgrade IE
Facebook Icon
Twiiter Icon
Youtube Icon
Google Plus Icon
LinkedInIcon
Call:   +91 89 2854 1424


Gera in News
 
 
 

In the REIT direction

Mid Day - 22 August, 2014

Mid Day - Pg. 17

Mid Day:

In the REIT direction

THE Securities and Exchange Board of India (SEBI)’ s approval to the establishment of real estate investment trusts (REITs) has evoked a positive response from the industry. The Board said that REITs should operate with an asset pool of at least R5 billion and be allowed to invest only in commercial properties, thereby bringing in more revenue to the real estate market, suggest experts. We analyse the impact of this move on the real estate sector.

Capital call A major issue before the real estate sector is fund constraint. With banks charging high interest rates, it had become tough for developers to get loans for housing projects. The situation worsened with low sales and builders had to stall work on projects.

Talking about the financial relief that REITs will bring, Surabhi Arora, associate director- Research, Colliers International, said, “ The realty sector is capital- intensive and requires incessant capital supply for long term, as construction has lengthy production cycle. REITs are entities that invest in revenue generating real estate assets and sell their units like a stock on the major stock exchanges.

REITs will bring the much needed capital infusion in the commercial real estate market and provide an exit route to investors from large projects.

Moreover, these instruments would not only offer much talked about benefits of a new source of capital but also would offer many long term benefits such as improved corporate governance in the sector. The advent of REITs would help in the evolution of much more transparent and mature market.” Developers, too, endorse this view.

Gaurav K Shah, director- Marketing, Ravi Group, said, “ REITs getting a go ahead by SEBI will enhance the depth of the country’s realty market. It will offer financing as well as exit options to developers and investors. The move by SEBI to issue guidelines for REITs is laudable as this would bring in positive sentiments in the real estate sector.” Time for transparency Countries like the US, Netherlands, Australia, Canada, Belgium, Japan, South Korea, Singapore and Hong Kong and France have adopted the REITs system, resulting in high dividends for them.

Experts feel it will make the real estate sector more transparent. For starters, it reduces over dependence on one source of financing and encourages more transparency. The fact that they are monitored by a regulatory body which increases the confidence of investors, as the financial records of the company are publicly declared. This will encourage even small scale investors to put their money into real estate.

Anuj Puri, chairman and country head, Jones Lang LaSalle India, said, “ It’s gratifying to note that SEBI intends to deliver on its assurances of bringing better and faster funding into Indian real estate. As the drafts for REITs stand now, further clarity about taxation eligibility norms is definitely required and will doubtlessly come before the first listing goes up.

When this happens, there will be a vastly increased interest from foreign investors.” Commercial gains Experts said the introduction of REITs will help the commercial real estate sector. With 50 per cent of the commercial properties hopefully getting listed under REITs, a large sum of money will enter the sector. Mukesh Bhagtani, CEO, Jaycee Homes, said, “ REIT as a financial tool linked with real estate offerings will bring greater transparency into the sector. It will pave the way for developers to get access to cheaper funds and give people a chance to invest small amounts in the real estate market. It will revive the prevailing stagnant scenario.

The growth of the commercial sector will in turn help expand the housing market.”

Ever since the new government came into power, it has shown the intent to generate affordable housing and pump in more money into the sector. Shah added, “Those planning to invest in property are expecting positive policy changes that are expected to boost the housing segment. This segment remains cautiously optimistic, and is expected to remain so in the short to medium term. In the next 3- 4 years, the sector can attract investments after its implementation. In the present scenario, if the sector has to bounce back from the lows, there is a need to introduce such a mechanism is needed.”

- Additional reporting by Kartiki Nitin Lawate

News Archive
 
 
 



Testimonials

I’ve been a sports person, and also captained my throwball and volleyball teams. I understand the importance of extracurricular activities in our growing up years.

Trainings provide a child with the required discipline when working within teams as well as gives one the chance to follow what makes you happy. It also enables an overall development!
Dance has been my passion since I was a child and I have been thrilled to see both my little ones have this in their genes too.

This opportunity really came to my doorstep through Gera. My daughters Lavanya and Diya have had an enthralling experience being a part of not just one but three Academies (The Shiamak Davar Dan..

I cannot thank you enough for making our journey with Gera so so interesting and mind-blowing. I had never ever imagined my life taking a beautiful turn with me beginning to start my career as a music teacher that too with SMA (Shankar Mahadevan Academy) and all this has been possible only because of GERA and YOU my dear.
It is only because of your efforts and kind gesture that I could meet the man himself (Shankar Ji) and have a small recording session with him. That was like a dream come true.
I am super excited to start my journey with SMA and Gera as a teacher now.

Apart from that, Me and Prateek have always been grateful to you for making Shiamak happen for us and I ..

It was indeed a pleasure being a part of the Christmas celebrations at Astoria. Kudos to the Gera team for bringing in such a wonderful event with great carol singing participation from our own kids. It brought in the spirit of Christmas and the games, Santa, the gifts only added to it. Thanks for organising such a wonderful event which helped in community building...looking forward to many more such celebrations!

..

The Christmas event organised at Astoria was a big success and a big step in bridging the gap between us and Gera. It was a memorable event as we are still in the beginning of our journey of life in our little home at Astoria. The kids have been the happiest of all and what more can we ask for when we see smiles on the faces of our little ones. Kudos to you and your team for making this event a huge success! Looking forward to many more in the years to come.

..

The Christmas party organised by Gera at Astoria this year was a great success with good participation from kids and parents. Our children Sia and Saish enjoyed the party to the fullest. Sia, in particular, had a gala time and reiterated her stand that Anita aunty's parties are THE BEST.... We as your customers take much pride in informing our friends that such goodwill gestures are one of the many differentiators Gera brings to us, which no other builder in Goa can boast of. Many thanks to you and your team for doing an excellent job in putting up this event. We look forward to the next one! A big thanks to the Gera Management for its efforts in community building.

..