Consider the following statements with respect to the Real Estate Investment Trusts (REiT):
1. REITs can set up for new as well as under-construction projects
2. REITs can be set up primarily for commercial projects
3. REIT is an alternative investment
Which among the above is / are correct?

Answer: [B] Only 2 & 3

A REiT is a listed entity which allows the investors (both retail and institutional), to invest in small amounts into a securitized real estate-linked  investment. Most of the earnings via sale / rent of such investments are distributed to its shareholders.

Rationale: To Real Estate developers, they improve the liquidity position, to investors, they give a secure avenue to invest in long term and

income-oriented real estate projects.

Key Points:

  • REITs are only for completed projects not the under-construction projects
  • REITs are primarily for commercial projects.
  • REIT is an alternative investment

This question is a part of GKToday's Integrated IAS General Studies Module