The industry is readying for a significant inflow of funds. Real estate funds have been launched by Kotak, HDFC, AnandRathi, ILF&S, ICICI Ventures amongst others. Typically, these funds own large properties, commercial office spaces, hotels etc, and earn rental income as well as gain from capital appreciation. They buy, develop and sell property and share profits with investors as in any other mutual fund scheme. Due to the local nature of real estate and complexity of transactions, it is not easy for investors to identify good investment opportunities on their own, in different cities and locations. Thus, these funds have the potential of being very popular with small investors as they make investments convenient and relatively risk free.
Real estate in India is becoming a catalyst for economic growth and if transparent comprehensive reforms are carried out in the sector, it alone would contribute to over 25% growth to achieve the 10% GDP growth rate for India.”
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