Mindspace REIT has recently launched IPO, and it has business park, best quality offices in Mumbai, Hyderabad, Pune and Chennai. BID opened on 27th July’20 and closed in 29th July’20.
|Bid Opens On||Jul 27, 2020|
|Bid Closes On||Jul 29, 2020|
|Finalisation of Basis of Allotment||Aug 6, 2020|
|Initiation of Refunds||Aug 7, 2020|
|Credit of Shares to Demat Acct||Aug 7, 2020|
|IPO Shares Listing Date||Aug 12, 2020|
- What is REIT
- Business Overview
- Investment Condition
- Restrictions on REIT
- Risk Factor
What is REIT
A real investment trust (REIT) is a company that Owns, Operates or Finances.
Income producing properties (Mostly commercial property-Offices)
Generate a steady income stream for investors.
Offers small part in the way of capital appreciation.
Understand clearly, It is a trust. They are not giving me shares. Mindspace Reit IPO will get me Units.
Units of what ?
Units of the investment that Mindspace Reit will do for their expansion. It mainly purchases a big IT park and rent major commercial offices.
For an example, in Pune there is a big IT park where Amazon has its office. Now Amazon pays rent to REIT, and REIT will pay me back in the form of dividends.
This way it acquires more land from the profit and also it required more money for expansion, thats why it came with IPO so people like me and you can invest.
This portfolio has 5 integrated business parks with superior infrastructure and ammonites.
WALE of 5.8 years. (Even during pandemic, REIT has collected rents from all offices)
REIT cannot miss-use the money invested by you and me. They are bound to follow certain guidelines.
80% money has to be used in the completed properties and rest 20% can be in incomplete projects and also in stock market.
Restrictions on REIT
There are 2 major restrictions :
- REIT cannot invest in vacant land, agricultural land or mortgages other then mortgage backed securities, and assets located outside India.
- They must distribute at least 90% of its taxable income to its shareholders(unit holders) annually.
Net Income = Rental Income – Expenses
- If Lease rentals are not renewed, income can drop drastically.
- Work from home structure may bring down rental income in future.
StockMony will suggest that yes If you want to diversify your portfolio then this might prove out to be a good investment.