According to a disclosure on the SEBI website, the securities market regulator has said that Embassy Office Park Property has filed an application before it for an in-principle approval to register a real estate investment trust (REIT).

If approved, it will be the first real estate sector REIT listing in the country.

“The applicants may please note that SEBI endeavours to process registrations, within 30 working days, from the date of the complete application along with relevant information,” SEBI said.

SEBI said it is processing the registration application call for information on aspects relating to the application.

Embassy counts Blackstone as one of its investors. Blackstone has been eyeing the REIT space and is also understood to be planning another REIT with its other real estate partner Panchsil.

If it takes shape, this will be the first REIT. The company plans to introduce Embassy REIT early next year following regulatory approval and will be close to Rs 4000-5,000 crores, as per market sources.

Recently, SEBI eased the rules norms governing real estate investment trusts (REITs) in a bid to make them more attractive. The proposed changes include allowing a larger number of sponsors and removing the investment restrictions on special purpose vehicles. A REIT is an investment vehicle structured like a mutual fund but with real-estate as the underlying asset. SEBI introduced the concept in India in 2014 to open the cash-strapped real-estate industry to investors, but not a single REIT has been created because of the restrictive norms.

Several real estate and PE players have evinced interest in REITs since the change in norms, including DLF, Blackstone Group, K Raheja and RMZ Corp and Nisus Finance among others.

DLF had previously said that it was preparing for REITs worth Rs.6,000 crore in the next two years

Ajay Jain, ED, Head, Real Estate Group, Centrum Capital Ltd said, “REITs have become a reality in India after the government exempted dividend distribution tax (DDT) from them. SEBI has also proposed to increase REITs’ exposure to under-construction properties from 10 to 20 per cent of total assets. In the case of India, REIT managers would be able to see discounts of as much as 20 -30 per cent when buying under-construction properties, as half completed projects are often cheaper than the finished product. Allowing REITs to invest up to 20 per cent in under construction assets will help widen the portfolio and the size of the REIT as well as give more flexibility to the REIT manager.

In a separate disclosure by SEBI, Reliance Infrastructure and Sterlite Power Transmission have also applied to set up Infrastructure Investment Trusts (InvITs), which are similar to the real estate funding instrument but will invest in infra projects instead.

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