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The Securities and Exchange Board of India is working out IPO modalities for issuance of units of Real Estate Investment Trusts (REITs).
“We have come out with the IPO guidelines for the issuance of units of Infrastructure Investment Trusts (InvITs). On the same lines, we are working on the IPO guidelines for units of REITs,” said Barnali Mukherjee, Chief General Manager, SEBI.
No accounting standards Delivering the keynote address at the RICS Real Estate Conference 2016 – ‘Commercial Real Estate: Corporate Catalyst’ with Cushman & Wakefield, Mukherjee said, “Since there are no accounting standards for REITs and InvITs, we have set up sub-committees looking at the financials to be brought out with the offer documents as also the continuous disclosures to be made; also set up a sub-committee for issuance of valuations, which will come out with its report.”
“We have already received four applications for InvITs, where two applications have been processed and two are registered.
“We have come out with amendments on REIT regulations to bring more clarity and make it more acceptable but as of now, we haven’t received any applications for REITs,” Mukherjee said.
Roadblocks cleared “Whatever SEBI could do has already been done, in terms of removing key roadblocks such as capital gains tax and DDT and now we are looking forward to applications for REITs,” she added.
Sachin Sandhir, Global Managing Director – Emerging Business, RICS, said, “Commercial real estate is expected to see continued demand, fuelled by positive business sentiment (especially in IT/ITeS and new-age digital businesses) based on major policy reforms undertaken by the government. There is also likely to be considerable international investor interest in income-yielding assets and the first REITs and InvITs are not far away.”
Mall stock In its report released at the RICS Real Estate Conference 2016 – ‘Commercial Real Estate: Corporate Catalyst’ Cushman & Wakefield said the top eight cities have REIT-eligible mall supply of approximately 39 million square feet, with Bengaluru, Delhi-NCR and Mumbai together accounting for about 64 per cent of the retail inventory.
India offers commercial real estate investment opportunity worth $43-54 billion (₹2.88 lakh crore – ₹3.60 lakh crore) across the top eight cities.
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