KOCHI: Investments in real estate have given perhaps the most consistent returns over the long period of time, especially in states like Kerala. But, unfortunately, it is also out of reach of small investors, given a cent of land costs anywhere between R5-15 lakh and even higher, depending on the location.
People buying a piece of land purely as an investment finds it cumbersome and time-consuming, considering the paperwork and registration charges involved, not to mention other irritants like verification of title deeds etc. Now, Finomis, a Kochi-based wealth management firm, has signed an MoU with KTC Land Developers LLP, to offer a product to allow investors to take exposure in premium commercial and residential real estate projects of the KTC Group for as low as R10 lakh.
“Investors can invest in the project for as low as R10 lakh, and in multiples thereof. We are targetting Non-Resident Keralites, especially those in the Gulf countries, Of course, local high net worth investors can also participate,” said Jacob Mathew, a partner at Finomis. Finomis is raising R150 crore in four projects, and in the first tranche, it is confident of collecting R50 crore. There is a lock-in period of three years for investors, meaning they need to stay invested for a minimum period of three years, which can be extended for two years - one year at a time, said Jacob.
“Ours will be the first of this sort real estate-linked financial investment in Kerala. The product will give small investors an exposure to big projects. If the investors feel they can get bigger returns they can opt for 100 per cent profit sharing,” he said.Anshuman Magazine, chairman, India and South East Asia, CBRE, a commercial real estate services firm, said, “India’s commercial real estate segment has been witnessing robust activity over the past few years. This has led to the segment emerging as an investment option for individuals or institutions as it provides sustained long-term returns.”
“This has led to several instruments being launched in the market to cater to the growing demand of investors wanting to invest in the segment.”For anyone looking to invest in this segment via these instruments, it is important to conduct the necessary due diligence before proceeding, he said.
“This includes reading all the fine print and understanding various components. It is also advised they stay invested for the long-term to get the full benefits of such investments.”