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India’s real estate sector has witnessed rapid growth in recent years underlined by robust economic growth in the country. Real Estate Investment Trusts (REITs) are common investment vehicles globally which pool monies of investors and invest primarily in completed, revenue-generating real estate assets (such as buildings, offices, warehouses, malls, etc.) and distribute a major part of the earnings among the investors. REITs are critical as they provide an exit avenue for the developers of commercial properties who can channel such monies to further commercial projects.
Previously, the Securities and Exchange Board of India (SEBI) had attempted to introduce REITs in India wherein it had issued draft regulations in 2008 but withdrew it later. Further, when the concept was revisited again, SEBI was more in favour of the mutual fund model for real estate investment. However, the same also could not materialise.
Recently, SEBI has issued a press release wherein it has revived an over five-year old proposal of REIT by issuing draft SEBI (Real Estate Investment Trusts) Regulations, 2013. Public comments have been invited on the same by 31 October 2013.