Should you buy REITs when multibagger realty stocks seem unstoppable?
REITs or Real Estate Investment Trusts are silently clawing back to prominence amid pick-up in demand for office space and rents moving north. REITs offer a diversification opportunity to investors at relatively lower risk, say experts who recommend a bite into this portion of the realty cake.
Market regulator Securities and Exchange Board of India (Sebi) allowing fractional ownership through small and medium-sized REITs (SM REITs) is expected to benefit not just this segment but also offer an additional revenue to the retail investor.
«These regulations have lowered entry barriers, making it easier for retail investors to participate in the real estate market with smaller investment amounts. The increased accessibility has democratised real estate investment, attracting a broader investor base and enhancing market liquidity,» Expert Aryaman Vir, CEO at WiseX said, adding that post the amendments, there has been a surge in enquiries from potential investors interested in fractional ownership opportunities.
Not just this, office REITs witnessed decent traction in gross leasing in the quarter ended March 31, 2024 indicating a healthy office demand trend. Occupancy for most REITs improved in Q4FY24 with further buoyancy expected in FY25, Nuvama said in a note. The brokerage remains sanguine about prospects for REITs on improving demand environment and the likelihood of interest rate cut as it retains its ‘Buy’ view on all REITs.
Currently, there are four listed REITs in India viz. Brookfield India Real Estate
