Sebi issues draft regulations for realestate investment trusts

Q: Market watchdog Securities and Exchange Board of India (Sebi) on Thursday issued draft guidelines to set up real estate investment trusts (REITs) in India, reviving an effort that it had put on hold in 2008 during the global financial crisis.

REITs are listed entities that mainly invest in income-producing real estate assets, from which most of the income is distributed to its shareholders.

"Sebi seems to have taken a very pragmatic approach at the REIT regulations. Lot of emphasis has been given to transparency and disclosures," said PwC India associate director Bhairav Dalal.

"Indian investors will get an additional investment opportunity to invest in real estate. It will also benefit real estate developers who will be able to transfer their developed assets into a REIT."

India's draft regulation for REITs comes at a time when its debt-laden developers are struggling to raise money for future growth ..

Maya Roa, Apartment Resident, Chandigarh

26th October 2013

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Thanks for providing your valuable suggestion on draft policies issued by SEBI.

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Maya Roa, Apartment Resident, Chandigarh

6th November 2013

Comment

REIT-is equivalent to a security that allows individuals to directly invest in income-producing real estate assets on a large scale. It is like a company which owns and operates the real estate related assets such as buildings, malls, hotels etc. Furthermore, REITs are entitled to special tax consideration and offer a liquid method to invest funds in real estate.

Harsha Mahipal , Bangalore

29th October 2013

Comment

Also heard with the establishment of REITs, potential Indian entrepreneurs and debt laden builders will get the golden opportunity to make some extra investment into real estate. Furthermore, builders who will be able to relegate their assets into a REIT will be highly benefited with the establishment of such a trust.

Vivek Kulkarni,

29th October 2013

The draft rules propose that only companies with assets worth Rs. 1,000 crore or above could list as REITs, provided they sell at least Rs. 250 crore worth of stock in the initial public offering.

Vivek Kulkarni,

28th October 2013

Comment