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Business News/ Markets / Stock Markets/  What is REIT or Real Estate Investment Trust?
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What is REIT or Real Estate Investment Trust?

Mindspace Business Parks REIT launched its IPO to raise a sum of ₹4,500 crore
  • The IPO will close on July 29
  • REITs were first introduced in India by SEBI in 2007
  • All cafés, bars and restaurants across three Worldmark buildings have fallen silent, as the nation-wide lockdown took effect.Premium
    All cafés, bars and restaurants across three Worldmark buildings have fallen silent, as the nation-wide lockdown took effect.

    Mindspace Business Parks REIT launched its initial public offer (IPO) on Monday. The company aims to raise a sum of 4,500 crore through the IPO which will close on July 29. It will be the second REIT to get listed after 'Embassy Office Parks REIT', if it succeeds . Once listed, REITs can be traded on stock exchanges.

    REITs were first introduced in India by Securities and Exchange Board of India (SEBI) in 2007. Through a circular issued on 23 April, Sebi reduced the minimum subscription limit for REITs from 2 lakh to 50,000.

    REIT or Real Estate Investment Trust is a company that allows investors to invest in the units of portfolio of real estate assets without having to own the physical property itself. It is a pool of investors just like mutual funds, who invest in the real estate as the underlying asset to generate return for investors.

    The investor makes money on a yearly basis. REITs are mandated to give investors a certain portion of the money back on a yearly basis. Investors also earn from capital appreciation.

    There are three types of REITs: equity REITs which purchase, own and manage income-generating properties; mortgage REITs which lend money directly or indirectly to real estate owners; and hybrid REITs which are a combination of the first two, according to a report by Care Ratings.

    REITs allow any investor- small or big to invest in portfolios of real estate assets. The stockholders of a REIT earn a share of the income produced through real estate investment.

    'Embassy Office Parks REIT' is the only listed REIT in India.

    Embassy Office Parks REIT was trading at 361.50 at 11:20 am on Tuesday. It has a total market cap of 27,896 crore.

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    Published: 28 Jul 2020, 12:05 PM IST
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