Hi Gary,
Fundamentally I agree with your view. However, globally, REITS are products that give 5-6% asset appreciation value + 5-7% yield via rental income which brings the total annual returns expectation to around 11-12%. I am not sure what your assumptions are for a 20-30% stock price appreciation. That seems a bit far-fetched to me.
Another tail wind here would be the inclusion of REIT/INVITS in front line indices. It will still take some time but globally REITS are a part of index. The S&P500 itself includes 8-9 REITS if I am not mistaken. Once REITS mature as a product in India, there is a very good chance of them getting included in our frontline indices. That will then increase the liquidity and pump up the share price especially by FII’s. However, I see all this happening a few years from now. Until then I believe its a good time to accumulate these and view them as an asset class to hold for the long term.
Just a disclosure from my side. I have significant exposure to REITS/INVITS in personal capacity. My views are based on individual research and could be biased.
| Subscribe To Our Free Newsletter |
