the REIT need to be at least Rs 1,000 crore, in a bid to ensure that initially only large assets and established players enter the market.
Further, minimum initial offer size of Rs 250 crore and minimum public float of 25 per cent is specified to ensure adequate public participation and float in the units.
The regulator has sought public comments on draft REIT Regulations by October 31, 2013.
The draft norms comes as the Indian real state sector witnessed rapid growth in recent years underlined by robust economic growth in the country.
The growing scale of operations of the corporate sector has increased the demand for commercial buildings and space including modern offices, warehouses, shopping and conference centres.
"For such rapidly growing industry, it is crucial that investment vehicles such as (REITs) evolve in the country," Sebi said in a draft paper.
Globally, framework for REIT exists in several countries including the US, the UK, Australia, Singapore, Japan and France.
In line with the nature of the REIT to invest primarily in completed revenue generating properties, "it has been mandated that at least 90 per cent of the value of the REIT assets shall be in completed revenue generating properties."
"In order to provide flexibility, it has been allowed to invest the remaining 10 per cent in other assets as specified in the proposed Regulations," it added.
Sebi said that REITs would be allowed to invest in the properties directly or through special purpose vehicles (SPVs), wherein such SPVs hold not at least 90 per cent of their assets directly in such properties.
However, in such cases, it has been mandated that REIT would have control over the SPV so that the interest of the investors are not jeopardised.
The REIT would not invest in vacant land or agricultural land or mortgages other than mortgage backed securities. Further, the REIT woudl only invest in assets based in India.
"Investment up to 100 per cent of the corpus of REIT has been permitted in one project subject to the condition that minimum size of such asset is not less than Rs 1,000 crore," Sebi said.
In a bid to safeguard the interests of