Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: TAX RATES - GOODS TAXABLE @ 4% :: Central Excise rule to resale the machines to a new company :: form 3cd :: articles on VAT and GST in India :: due date for vat payment :: cpt :: TDS :: VAT Audit :: empanelment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD :: VAT RATES
« News Headlines »
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout
 Income-tax (27th Amendment) Rules, 2016 - 92/2016
 Announcement - Clarifications in Respect of MEF 2016-17

REIT rhymes with `sweet'
June, 21st 2007

You don't have to be a multi-millionaire to own "a piece of property in New York, Paris, Tokyo, Sydney, or even Seoul or Kuala Lumpur," assures Dominic Whiting in Playing the REITs Game (

Yes, the secret `real' key is REIT or real estate investment trust. "The right pronunciation of REIT in English rhymes with `sweet'." Sweeter should be the returns from the winning REITs, but first what is REIT? In its simplest form, REIT is a way of securitising property; it breaks down the ownership of one or more buildings into units that are sold to investors and usually listed on the stock market, explains the author.

While stock markets have given investors access to a myriad of companies, and bond markets let investors lend to governments and companies around the world, "new and fast growing REIT markets allow property to be traded from minute to minute in the US, Australia, and now several countries in Asia and Europe." In terms of risk and return, REITs are generally regarded as a halfway house between stocks and bonds, says Whiting.

Even as India waits for REITs to become a reality, the avenue is active around the world. "For example, in Australia, about 70 per cent of investment grade property is already in the hands of REITs both unlisted and listed property trusts (LPTs)." Japan has about $1.3 trillion of investment-grade property; Nippon Building Fund, the biggest trust in that country, saw its share price "double in its first three years of life."

In Hong Kong, Link REIT saw its share price jump as much as 70 per cent in its first month of trade in late 2005, recounts the author. The trust had been "formed with shopping malls and car park spaces sold by the city's housing authority in the world's biggest IPO (initial public offering) by a REIT."

Talking of IPOs, `India's biggest IPO' was that of DLF, a real-estate development company, which raised $2.24 billion, last week, in an issue that was oversubscribed nearly four times.

Blackstone, world's second-largest buyout fund that made its first management buyout in India, by acquiring the back office company Intelenet Global, is heading towards a $4.75-billion IPO, billed as the fourth-biggest in US history. Blackstone has been aggressive on the REIT front; its $39 billion leveraged buyout of Equity Office Properties Trust was a defining moment in the REIT industry. The US has the oldest REITs market; in 2006 it had "about 180 trusts with a combined worth of just over $300 billion." It may be a matter of time before India has an established REIT market, but a key problem can be the paucity of quality buildings, writes Whiting. "Of India's $300 billion of commercial buildings in 2006, only $83 billion worth can be considered investment-grade and could be considered for a REIT." New buildings, however, are rapidly coming up, and experts point out that these properties would make the grade.

In India, success can be haphazard, beginning with `the good fortune of owning prime plots of land,' observes the author. "The industry is hampered by poor foreclosure laws, tedious property registration processes, tax and transaction laws that vary by the state and frequent contests over property ownership."

Essential read for investment advisers and resourceful accountants.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Privacy Policy

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions