SEBI to allow REITs and InvITs to take off this year


In a push to make real estate investment trusts and infrastructure investment trusts take off this year, regulator SEBI is likely to announce relaxations in regulations, this month

With an aim to give capital markets a big push, the Securities and Exchange Board of India (SEBI) is likely to ease out regulations for real estate investment trusts (REITs) and infrastructure investment trusts (InvITs), this month.

“We are likely to take a call in our board meeting this month. I am very optimistic that REITs and InvITs will take off this year,” said SEBI chairman, UK Sinha. The move is being taken, after SEBI received suggestions to change these norms. Noting that multiple applications have been received for registration for REITs and InvITs, the SEBI chairman also said that these investment vehicles are expected to take off this year. “I am very optimistic that REITs and InvITs will take off this year,” he said.

See also: Crowdfunding versus REIT: Crucial differences

SEBI had come out with regulations for REITs and InvITs in 2014. However, investors wanted further measures, including tax breaks, to make these instruments more attractive. While the government provided for certain tax benefits in the budget this year, the SEBI has now decided to further relax the rules.

Among others, SEBI’s board is expected to consider an easier set of norms on REITs and InvITs. It may allow the REITs and InvITs to have up to five sponsors, as against the current norm for a maximum of three. Under the proposal for REITs, SEBI would allow up to 20% investment by such trusts in under-construction projects, up from a maximum of 10% allowed currently.

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