Punjab Board of Investment and Trade (PBIT) has implemented Real Estate Investment Trust (REITs) tax policy reform via government of Punjab. "REITs are mutual funds that use pooled capital of a large number of investors to purchase develop and manage real estate assets. Units of a REIT funds are listed/traded on a stock exchange," a spokesman of PBIT said here on Saturday.
REIT is an ideal vehicle for small savers and other individuals to invest in real estate while maintaining the liquidity and benefits of the capital markets. REIT has multiple benefits to economy such as it can bring transparency to real estate transactions, increase participation of general public in profitable real estate projects and kick start economic activities, eliminate housing backlog and provide quality living, bring standardisation and best practices to the construction industry, efficiently channels Foreign Direct Investment and substantially increase government revenues.
The spokesman said REITs could also provide a viable channel to direct foreign investment into the country's housing sector. Assuming an annual incremental shortfall of 370 thousand units, according to an estimate, REITs could trigger additional economy activity of over US $4 billion by filling this gap.
It can also contribute to increase employment opportunities and documentation of the economy through recording of transparent transactions, he added. The spokesman said REITs could fulfil the government's objectives of generating higher revenue, creating employment opportunities for the masses and providing quality housing for the public. REIT is an attractive investment vehicle which can channelize foreign investment and deepen domestic capital markets, he added.
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