The regulatory authority of pensions in our country has strategically made way for long term retirement funds to invest in the real estate sector. They will now be able to invest a gigantic 5% of their cumulative corpus in regulated real estate investment trusts. Thus pension funds can and will benefit from the high return on investment yielding and low risk, real estate sector of our great nation.
The PFRDA – pension fund regulatory and development authority has issued its brand new investment guidelines merely a few days back. Thus a few thousand crores hailing to the NPS – National Pension Scheme, can be invested in the very near future, in the otherwise limping and cash short real estate sector.
The all important NPS has a humungous corpus of a staggering Rs 86,000 crores. The revised and improved guidelines of PFRDA will also be applicable to Atal Pension Yojana and NPS Lite. The centre government has also strategically allowed a tax exemption/relief for investments made by individuals up to Rs 50K in the national pension scheme in the recently tabled budget for the financial year 2015-16. This move will further spike investment corpus of the NPS which already is a recipient to steady and continuous inflows of government employee’s retirement savings, without fail and exception.
The room for this brand new asset class, that is real estate, has been forged by slashing down the earlier fixed allocation towards the various government securities to 50 percent from 55 percent. This newish investment portfolio/structure is rightly expected to significantly help increase the return on investments of the national pension scheme. June 10th will mark the day from when the new guidelines will apply from. Under these newly introduced investment pattern which was notified to one and all by the supremely crucial PFRDA, pension funds including the NPS can invest as much as a whopping 50% of their total corpus in hand, in government securities and other similar investment instruments. NPS has surely become a whole lot more attractive and lucrative option with the inclusion of real estate in it.
This move will bring some heavily needed respite to the real estate sector. When you add to this a plethora of other recent strategic developments, then you will realize that real estate is all set to bounce back pretty soon. Thus this is just the opportunity which real estate investors were waiting for, as now is a tremendous time to invest in real estate, especially that of Delhi NCR. So absolutely do not waste this precious opportunity and invest in real estate today.