Sebi pushes for real estate trust

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SummaryThe Securities and Exchange Board of India (Sebi) is in talks with real estate industry bodies to see if the Real Estate Investment Trust (REIT) could be introduced in India.

The Securities and Exchange Board of India (Sebi) is in talks with real estate industry bodies to see if the Real Estate Investment Trust (REIT) could be introduced in India.

This would be Sebi's third attempt to put in a regulatory framework after its first two attempts over the last five years fell through. In 2008, Sebi put out draft regulations for REITs, but those were later withdrawn. Subsequently, Sebi allowed asset management companies to launch real estate mutual funds, but that initiative did not see much interest.

Ananta Barua, Sebi’s executive director said, on Friday: “We are engaged with Asia Pacific Real Estate Association (APREA) and other industry bodies over REITs”. He was addressing a seminar on ‘Dawn of REITs in India’, organised by APREA.

Barua added that there are “3-4 top concerns” on REIT, which are mostly related to how it should be structured. “Whether it will come under Collective Investment Scheme (CIS) regulations, or Alternative Investment Fund (AIF) regulations, or whether there needs to be totally new REIT regulations, are all under discussion with all the stakeholders,” he said. He also said that if REITs are made available to retail investors then the structure will be totally different. However, he refused to give a time line for REIT's implementation.

One of the major hurdles in the way of REIT’s implementation is said to be India's taxation regime, which the industry is asking should be made conducive for the model to successfully go through, this time around.

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