New Delhi : To safeguard investors’ interest in the newly created business trust structures — REITs and InvITs — Sebi norms will require them to mandatorily list on stock exchanges and follow stringent norms for disclosures, related party transactions and valuation of their assets, reports PTI.
The new norms for Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs), instruments that will help attract more funds into these key sectors, was approved by the board of market regulator Sebi on Sunday. Assets worth around USD 12 billion are likely to be listed in the next 2-3 years, according to industry experts.
“Currently, Grade A office space in top seven cities of India amounts to around 376 million square feet, and we anticipate that around 50 per cent of this space will get listed in next 2–3 years,” said Anuj Puri, Chairman and Country Head, Jones Lang LaSalle.
The valuation of these assets is around USD 10-12 billion, and this accounts for a fairly massive influx of funding waiting in the wings to hit the Indian real estate market via REITs over the next few years, he said.
“This move is a positive signal for the country’s capital markets as a whole, and the realty sector in particular. Reducing the minimum requirement for commercial real estate asset sizes permitted to be listed in REITs from Rs 1,000 crore to Rs 500 crore is likely to generate more income through this new funding channel and encourage many mid-sized development firms to consider this avenue,” CBRE South Asia Chairman and Managing Director Anshuman Magazine said.