“Investors should also assess the valuation, potential rental earnings, yield, and capital appreciation of underlying assets. They must also pre-assess returns on eventual exit and liquidation as much as possible. Moreover, as per the recent guidelines by Sebi, SM Reits are required to ensure that 95 per cent of their assets must be operational and distribute at least 95 per cent of net distributable cash flows. Reits too are mandated to distribute the majority of their net operating income to shareholders in the form of dividends, thereby ensuring stable income. If preferring to invest through FOPs, investors should check whether the complete set of activities undertaken by FOPs falls under the regulatory ambit of the Real Estate Regulatory Authority (RERA). In the case of commercial real estate, investors can also assess the tenant mix and check for lease tenure and expiries, for the property they wish to invest in,” Nadar said.