1 min read.Updated: 07 Dec 2020, 11:59 AM IST Edited By Avneet Kaur
Kotak International REIT Fund of Funds offers an opportunity for domestic investors to invest and benefit from growth in real estate market without actually owning the entire asset.
Kotak Mahindra AMC (Kotak Mutual Fund) launched Kotak International REIT Fund of Funds, India's first diversified REIT Mutual Fund. Kotak International REIT Fund of Funds is an open-ended mutual fund scheme that will invest in units of SMAM Asia REIT Sub Trust Fund. This mutual fund scheme will have a diversified investment portfolio comprising of listed REITs which will invest in real estate projects like residential, office, data centres, warehousing, retail and hospitality.
The New Fund Offer (NFO) is open and will close on 21st December. Kotak International REIT Fund of Funds offers an opportunity for domestic investors to invest and benefit from growth in real estate market without actually owning the entire asset. Real Estate Investment Trusts (REIT) own, operate, or finance income-generating real estate.
"While REIT market has seen limited growth in India, the Asia Pacific region provides a phenomenal opportunity for local investors to benefit from growth across sectors of real estate. These regions are expected to see a massive demand in real estate backed by growth in consumer spending, urbanization and becoming the epicentre of global trade," says Nilesh Shah, MD & CEO, Kotak Mahindra Asset Management Company.
The SMAM Asia REIT Sub Trust Fund is one of the largest Asia Pacific (Ex Japan) REIT funds investingin listed REITs in the Asia Pacific region. It is managed by Sumitomo Mitsui DS Asset Management Company Limited, which has a significant portfolio of listed Real Estate Investment Trusts in Singapore, Australia and Hong Kong.
Katsunosuke Ozawa, Councilor, Sumitomo Mitsui DS Asset Management Co. Ltd, Asia REIT Sub Trust Fund, said, "We are delighted to be part of Kotak's international REIT Fund. The new fund will help India's long-term investors to invest in diversified portfolio of real estate projects across Asia Pacific region through listed REITs we invest in. With strong demand for office spaces, residential, warehousing, retail and hospitality in Asia Pacific regions, investment in our REIT fund offers an opportunity to investors in India to grow their wealth over a period of time."
Investment in a REIT FoF gives an opportunity to investors to create a more balanced portfolio with asset allocation beyond the traditional equity and debt instruments.