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Report: InvITs, REITs likely to be launched in 2017

Posted by BrickAcres on May 23, 2016
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The much-awaited Infrastructure Investment Trusts ( InvITs ) and
Real Estate Investment Trusts ( REITs ) are likely to be launched
in the country next year, says a study.

REITs and InvITs helps to finance,develop and manage infrastructure
that drives growth and productivity. Also they can facilitate the
process of setting up large-scale housing for ordinary citizens,key
workers and the disadvantaged. In short, these securitisation
vehicles can help to build enhanced communities that will enrich
hundreds of millions of lives across the sub-continent.

“Currently, the market for REITs and InvITs is relatively nascent in
the country. However, with various enabling factors such as the
growth of the economy and the middle class, and a concomitant need
for housing and infrastructure, the demand for these investment
vehicles will see an upswing over the next few years,” PwC Partner
-Tax Abhishek Goenka said in a statement.

He said the first InvIT is expected to be launched in March next year,
while REITs by the end of 2017.

As per PwC-APREA report,The REIT market has evolved substantially in
several countries and these investment vehicles have gained immense
-ely in terms of their market capitalisation. A primary condition
for the growth of these markets, as demonstrated by the experience of
different countries, is their ability to customize regulations
governing these investment vehicles in conformity with domestic market
conditions.In the near future,we expect REITs to increase the depth of
the Indian property market through a sound regulatory framework which
ensures transparency and high governance standards,and promotes regular
monitoring of their performance.

The market for REITs and InvITs is relatively nascent in India.However,
with various enabling factors such as the growth of the economy and the
middle class, and a concomitant need for housing and infrastructure, we
are positive that the market for these investment vehicles will witness
considerable growth in the near future.

REITs were first introduced in the US in the early 1960s and have since
then been adopted as a preferred investment mode across the world. Over
the years, they have constructively changed the way in which the real
estate market operates, benefitting investors as well as real estate
developers.

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