The document discusses financing options in the Indian real estate market. It notes that real estate is a fast-growing sector that contributes 5% to India's GDP. The government is supporting the sector through funding for affordable housing projects, increased FDI limits, and tax deductions for home loans. Emerging financing options like Real Estate Investment Trusts (REITs) and Real Estate Mutual Funds (REMFs) provide smaller investors more liquid access to real estate returns while offering benefits like diversification and professional management.

1. Finance in Real Estate
Manish Nagori

2. Contents
Manish Nagori
•Overview of the market
•FDI
•Government Relief
•Next-gen Financing Options
•Benefits of REITs and REMFs

3. Manish Nagori
Real Estate Market
• Real estate is one of the fastest growing sectors in the Indian economy
• Contributes about 5% to India's GDP
• The country's economic growth is driving the demand for real estate
• Demand for residential space is expected to grow at a CAGR of 19%
between 2010 and 2014
Source: IBEF March 2014 Real Estate report

4. Manish Nagori
FDI- Foreign Direct Investment
• Real estate sector is the fourth largest sector in terms of FDI in the
country
• From April 2012-January 2013, the sector accounted for 8.8 per cent of
total FDI inflows into India
• FDI in the sector is estimated to grow to US$ 25 billion in the next 10 years
Source: IBEF March 2014 Real Estate report

5. Manish Nagori
Government Relief
Housing for economically weaker sections:
• Allocation of USD1.1 billion for Rural Housing Fund and USD0.37 billion for
Urban Housing Fund in FY14 budget
FDI :
• The govt. has allowed FDI of up to 100 % in development projects for
townships and settlements
• FDI of up to 100 % is allowed in the hotel and tourism sector through the
automatic route
Ease in housing finances:
• Deduction of up to USD 1,841 on interests payable on home loans of up to
USD 46,032 announced in the Union Budget 2013–14
Source: IBEF March 2014 Real Estate report

6. Manish Nagori
Next-Gen Financing Options
Real Estate Mutual Funds (REMF)
• Functions like any other mutual fund
• REMF invests directly in property or indirectly in the equity of real estate
companies instead of investing in stock or bonds
Real Estate Investment Trust (REIT)
• A security that sells like a stock on the major exchanges and invests in real
estate directly, either through properties or mortgages
• REITs receive special tax considerations and offer investors high yields
• Highly liquid method of investing in real estate

7. Manish Nagori
Benefits of REITs and REMFs
• Capital availability for real estate and infrastructure projects
• Entry to small investors due to high liquidity and small investor size
• Diversification benefits in portfolios
• Dividend income and long term capital appreciation
• Attractive to institutional investors due to transparency and professional
management

8. Manish Nagori
Thank You