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DLF plans to come up with first REIT

Realty major DLF Ltd is readying plans to float the country’s first Real Estate Investment Trust (REIT) to raise an estimated Rs 6,000 crore over the next two years, according to a published report.

While the company will use the funds to finance projects, it will offer individuals and institutions an alternative investment vehicle to earn returns from realty projects.

In REITs, pooled funds are invested in specific projects. REIT unit holders earn returns from value appreciation or rental income of these projects.

This is very similar to MFs where shareholders or unit holders own stocks of companies indirectly through funds that pool money from individuals and invest in shares. If the share prices of these companies go up, benefits also flow out to individual unit holders of the MFs.

DLF’s Executive Director Rajeev Talwar was quoted in the report having said the company has engaged JP Morgan and Morgan Stanley as investment bankers for the launch of two REITs. “We will have the first REIT of the country, that is for sure and this would be over the next one year,” Talwar said.