Indian Real Estate Funds (Private)

hoag2004 · Post by **hoag2004** » Wed May 09, 2007 2:37 am

Would any of the forum members have any experiences (bad or good) with these investments which I hear are more like REIT's?

raguraam · Post by **raguraam** » Mon May 14, 2007 7:47 pm

I also raised a similar question. No response so far. I guess REITs are not yet there in India. However, I will let some experts here to confirm or correct this.

hoag2004;23650Would any of the forum members have any experiences (bad or good) with these investments which I hear are more like REIT's?

obiwankanobi · Post by **obiwankanobi** » Wed Jun 20, 2007 2:53 pm

http://news.moneycontrol.com/india/news/business/foreignventurecapitalfundstrinitycapital/foreignvcsdeniedaccessintoindia/market/stocks/article/224130

http://www.yaseranwar.com/2006/07/housing-boom-in-india.html

There are reits, but not much information about them are available on the net.
I intend to invest in INDIAREIT, but the minimum investments is 10 lakhs now and the 5 lakhs each subsequently in every year (if I am not mistaken)

OB1

nagari · Post by **nagari** » Wed Jun 27, 2007 8:31 am

One of the investment consultant in my bank is proposing me to invest [min of 25L = 10L in this week, 15L in next 6-18 months] in Paramal groups REIT:
http://www.indiareit.com/html/index.html

Meghraj group would be their valuation consultant and the scheme (Indo/British meaning of scheme ;)] would

With my concerns about anticipated slide in real estate, he says that this REIT invests right from consolidation stage [getting land from farmers/owners for SEZ/residential/commercial complexes] and it is a different level to consider for slide down as contrasted with secondary market we see [Builders-> end owners or end owners -> owners : this market may have saturated but not the consolidation stage -- per this consultant].

Personally, I would have preferred to invest in REIT compared to land -- with appreciation, white money grows white as opposed to land[Hope I did not overlook any aspect]. However not yet convinced about the argument that REITs may not be affected with any slidedown in RE market if it happens. So I am not sure if I should invest 25L in this group as opposed to invest in a land.

Any thoughts? Any experiences with Piramal group? An FAQ from the consultant is attached.

Standard disclaimers apply. I am not proposing this investment, I am asking your inputs so that I may take an informed decision.

thanks,
/nagari

nagari · Post by **nagari** » Sat Jun 30, 2007 12:51 am

Bumping my request -- if any one has any comments to add, please post your comments.

thanks,
Nagari

RRK · Post by **RRK** » Tue Jul 03, 2007 11:35 pm

#1
I received the email asking for my comments on Indian REIT funds.

Most of these funds are private funds ( hedge funds, VC funds) and not monitored by SEBI, valuations can be very misleading, very high entry barrier, tight liquidity and abundant opportunity for scams.

I am not specifically targetting any particular fund. I haven't invested in any of them.

But there are other options.
If you are bullish on International REIT, you can look at FIREX ( disclaimer: I own).
Of if you are particular about Indian REIT, you can invest in the RE companies directly. There are only handful of good companies, all over valued. But if one wants, the stocks can always be bought.

Unitech
DLF
Shoba
Parsvanath
GMR Infra
Nagarjuna construction
L&T

In addition, one can add metals (Tisco, hindalco) and cements (ACC, gujarath Ambuja, madras cements, sree cements, grasim ) to the portfolio.

nagari · Post by **nagari** » Wed Jul 04, 2007 7:39 am

thanks RRK for your response.

Although I keep hearing that SEBI is thinking to have a regulation that would make Indian REIT ETFs, it's just a speculation.

thanks,
nagari

obiwankanobi · Post by **obiwankanobi** » Wed Jul 04, 2007 1:55 pm

I would like to know who is your consultant.

The other things that I know about this fund are
a) There is a hurdle rate of 10%
b) Fund size is 700 crores with a liquidity of 30 crores. So you should be able to sell it with a penalty.
c) Fund lock out period is 6 years
d) Previous version of this fund did well.
e) I am told this fund has already identified where to invest.
f) I am told this fund has asked for more whereas its counterpart in Reliance has not done so.

The cons
a) I think Mumbai rains would affect RE in Mumbai (where else) and this fund might invest a good chunk in Mumbai.
b) I don't know the penalties for selling early
c) I do hear good things for RE in a commercial sense though not residential ones and this fund would invest in residential too.
d) I am also skeptical about the less visibility of this fund.

I have decided to put my money down and then repent.

OB1

nagari · Post by **nagari** » Wed Jul 04, 2007 2:25 pm

#5, OB1, This investment consultant is from ABN Amro investment. He says that thus far this REIT is much better than earlier floated REIT funds -- HDFC Kotak, Reliance and earlier REITs from Piramal group itself -- in terms of visibility of investment(according to him, this is the first time an REIT fund is mentioning which projects would be supported even for prospective buyers of the fund), entry level(25L as opposed to 2Cr.).

I did not confirm the equivalent exit load(penalty).

What did you mean, " I have decided to put my money down and then repent."

thanks,
Nagari.

obiwankanobi · Post by **obiwankanobi** » Mon Jul 09, 2007 2:24 pm

I meant that I have decided to invest in it.
My consultant is ABN too. Who is your relationship mgr?

OB1.