Today, millennial investors have interesting investment options which, if used wisely, could turn attractive.
What is REITs and how does it work?
Anyone can buy shares in a publicly traded REIT. They offer the benefits of real estate ownership without the headache or expense of being a landlord. In India, currently, the Bengaluru-based Embassy Office Park is the only listed REIT available for investments, though there are quite a few companies in the pipeline to launch their REITs.
Embassy REITS came up with the IPO in March 2019 at an offer price of Rs 300 per share. Now, (after nine months) it trades around Rs. 415 (almost 40% appreciation from the IPO price). With REITS having commercial property as its underlying assets, it is mandated to distribute 90% of its earnings as dividend to investors. For the completed half year, the company has declared a dividend of Rs. 11.4/- per share. Considering the same dividend rate for the rest of the year (11.4x2=22.8), this would work out anywhere between 7.5-8% (22.8x100/300 = 7.6%). Embassy REITs offer the benefits of real estate – property appreciation and rental yield – besides offering the rate transparency and liquidity by trading in the stock exchange. Further, the physical assets cannot be sold in parts, whereas, REITs can be sold in parts (Embassy REITs shares can be sold/bought in a minimum lot of 200 units).
Sovereign Gold Bond
The SGBs are offered in tranches by RBI in consultation with the Centre. These bonds will be denominated in the multiples of a gram of gold with the minimum unit of 1 gram.
The interest for the gold bonds will be 2.50% per annum which is payable semi-annually on the nominal value. The tenure of the bond will be for a period of 8 years with an exit option available in the 5th, 6th and 7th year on the dates of interest payment.