Real estate stocks gain as SEBI clears final guidelines for REITs

Written by fe Bureau | Mumbai | Updated: Aug 11 2014, 18:53pm hrs
REITs SebiSebi chief U K Sinha had said that the proposals with respect to REITs, InvITs cleared by board.
Realty stocks gained as much as 3 per cent on Monday after the Securities and Exchange Board of India (Sebi) announced the final guidelines of Real Estate Investment Trusts (REITs) on Sunday.

Among the BSE Realty stocks, Anant Raj (2.97%), DB Realty (1.29%), DLF Ltd (2.90%), Godrej Properties (0.49%), Housing Development and Infrastructure (2.40%), Indiabulls Real Estate Ltd (2.53%), Phoenix Mills (2.53%) and Oberoi Realty (1.74%) were trading higher. The index itself was trading 1.84% higher at 12.31 pm IST. In YTD, the BSE Realty has given returns of 30.7%, outperforming the BSE benchmark Sensex which has rose 20.54% during this period.

The regulator also announced guidelines for Infrastructure Investment Trusts (InvITs). Among infrastructure stocks, Adani Power (2.34%), JP Power (1.74%) and Crompton Greaves (2.34%) were among the major gainers.

In the final guidelines, Sebi has halved the minimum size of assets that can floated to Rs 500 crore from Rs 1,000 crore, as originally envisaged. Among other guidelines announced by the market watchdog, REITs and InvITs must have a controlling stake of at least 50% in a special purpose vehicle (SPV) if they chose the SPV route. The SPV must hold at least 80% of the assets directly in properties and cannot invest in other SPVs.