What is REIT mutual funds India?

REIT or Real Estate Investment Trust are the real estate mutual funds India. They provide ample opportunities to people to invest in the real estate market. REIT has a maintained portfolio of real estate which is sold to investors through a public offer. The unit holders can buy or sell their units in the secondary market thereafter. I will now tell you about what is REIT mutual funds India and how they work here.

There are certain rules and regulations that are laid down by SEBI and investor preferences. Have a look at them:

• Just like other mutual funds, REIT should have a 3 tier structure with sponsors who set up REITs, managers to run the portfolio, and trustees to watch over both sponsors and managers.

• SEBI says that sponsors should hold 25% of the REIT units for three years post IPO and 15% after that

• There is an investment management company who is responsible for the REIT returns. This management company buys and sells assets, gets them valued, audited and negotiates rent agreements with the clients.

• The REIT managers charge a percentage fee to manage funds and manage property.

• The managers in REIT must have Rs. 10 crore of net worth and 5 years experience in real estate industry whereas sponsors must have Rs. 100 crore net worth and 5 years experience in the industry.

• The minimum application size for a REIT in an IPO is Rs 50000 while the minimum trading lot in the secondary market is 100 units.

• Indian REITs are allowed to own constructed commercial properties only

• Among the 100% of REIT’s portfolio, 80% should be invested in completed and rent generating properties

• Ideally, the 51% share of REIT revenue must be from renting

These are some of the very important points you must know about real estate mutual funds India.

Some of the top real estate mutual funds India are:

• Embassy Office Parks REIT

• Mindspace Business Parks REI

• Brookfield India Real Estate Trust