REITs and InVIts – Going Beyond the Buzz
“To some, possibilities mean comic relief; others use it to rehash the formulaic.“
– Anonymous
A quote that very eloquently describes the current ongoings when it comes to all things investment today, as more people discard the petty comforts of the tried and tested.
Investing, for a large demographic till now, meant exploiting a finite number of financial instruments, like buying stocks of a company, buying portfolios with mutual funds, bonds, commodity derivatives, saving schemes, insurance policies, amongst others. Think of it as a realm where certain things never truly go out of fashion, and trends don’t really change, and comebacks are so scarce that it might just fill the back pages of every financial tabloid, if not broadsheets.
But things are definitely changing right now, as investing choices and channels become much more dynamic, vibrant, and democratic. In fashion terms, one can easily think of it as that wardrobe makeover that was long overdue.
Traditionally, investment strategies have always focused on one thing and one thing only: corporate equity, opting for the same old permutations and combinations. But then everyone had that eureka moment to come to a much-required realisation that real estate and infrastructure assets can also be invested in. I honestly don’t know why it took them so much time to figure this all out, since people have been doing property transactions since kingdom come. ( Bombay became British because of it.)
But now that things have been set into motion, real estate assets and infrastructure assets have emerged as hot potatoes, paving the way for recalibrated capital frameworks and a more open and transparent liquidity market. Sectors that were previously considered off-limits for a retail investor have emerged as spaces where everyone wants a piece of the action just because of FOMO.
And exposure to these sectors makes practical sense, as India transitions to become a developed and mature landscape. The demand for better houses, office spaces, roads, and bridges won’t really ever stop, so when it comes to portfolio diversification, there is really no reason why one shouldn’t invest in them. ‘So one can have a piece of real estate for as low as 1000 or 1 Lac.
But the really cool part about a real estate investment trust or an infrastructure investment trust lies in the fact that events of puny political significance don’t really affect their overall performance. If you are a person of calm tastes who doesn’t really enjoy the drama of a bull or bear run, then this is indeed the space for you to invest in, because continuity of an assured return is an ethos that these portfolios definitely guarantee.
And yes, because infrastructure and real estate assets appreciate over time, it ideally becomes your perfect hedge against inflation, ensuring that an abrupt rise doesn’t lead to an abrupt change in your gains.
And investing in REITs or InViTs also means earning some much-needed bragging rights, because you can rightfully claim to be a cog in an India that is truly becoming Vikasit. The fact that your wealth contributed to transformative growth is a show-off you can harmlessly flaunt.
So, if you are looking for investment approaches that don’t scream startups, emerging sectors, and market trends all the time, and you are also a connoisseur of long-term returns, the REITs and InvITs are something you can definitely look into. They are the things in fashion in the world of investments currently, and I don’t see any harm in keeping up with the trends.
To me, it’s not just about the latest talking points across new and social media; rather, these investment approaches are an invitation to truly experience a bouquet of asset classes that make you feel relaxed, proud, and assured. And that’s definitely not the worst deal to ever embrace.