The Indian REITs Association is seeking the Reserve Bank of India's (RBI) nod for raising funds from banks. At the first-ever roundtable organised by the recently formed IRA, chief executives of the four listed REITs attended and discussed further the industry's growth opportunities and challenges.
As per sources, individual REITs have also been in conversation with the central bank for some months now and the association has also reached out. Furthermore, the association is seeking REITs to be classified as equity and included in indices for increased acceptability among investors.
At present, REITs can access the capital markets through bond and equity issuances. The recently amended regulations by SEBI stipulate that an SM REIT's listing process will resemble an IPO but with a key difference in asset completion requirements. At least 95% of the assets for SM REIT schemes must be fully developed and generate revenue, compared to the 80% requirement for larger REITs.
The roundtable was attended by Alok Aggarwal, MD and CEO of Brookfield India Real Estate Trust, Aravind Maiya, CEO of Embassy REIT, Ramesh Nair, CEO of Mindspace Business Parks REIT, and Dalip Sehgal, CEO of Nexus Select Trust.
The Indian REITs Association was launched in September 2023, under the guidelines of SEBI and the Ministry of Finance. The key agenda is to drive items such as strengthening the operating and regulatory environment for the Indian REIT market and increasing investor education programs among others.
Meanwhile, REITs are a global asset class first introduced in the United States in 1960 to allow retail investors to invest in commercial real estate in a liquid vehicle listed on the stock exchanges. In India, there are four listed REITs.
Last week, SEBI chief Madhabi Puri Buch at the fifth SEBI-NISM Research Conference said the regulator will strive to bring down the minimum investment size for REITs. She added, "The strength of our equity market comes from our retail investors. What it reflects is the fractional ownership of companies. In a similar manner, the fractional ownership of real estate and infrastructure is where the strength of the country will lie."
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