What is REIT or Real Estate Investment Trust?
Mindspace Business Parks REIT launched its IPO to raise a sum of ₹4,500 croreThe IPO will close on July 29 REITs were first introduced in India by SEBI in 2007
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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