Small and medium-sized Real Estate Investment Trusts are notified by Sebi

By Bricksnwall | 2024-03-10

Small and medium-sized Real Estate Investment Trusts are notified by Sebi

According to the notification, the new rules will be known as the Sebi (REIT) (Amendment) Regulations 2024.


The Securities and Exchange Board of India (SEBI) has released regulations to update the REIT Regulations 2014 and to set parameters for the creation of Small and Medium Real Estate Investment Trusts (SM REITs), according to the notification. This is part of an effort to regulate the fractional ownership business.


It stated that the new rules will be known as the Sebi (REIT) (Amendment) Regulations 2024.


Real Estate Investment Trust, or REIT, is defined as an entity that pools at least fifty crores of rupees to acquire and manage real estate asset(s) or property(ies). This would entitle such investors to receive the income generated consequently without filing them the day-to-day control over the management and operation of such real estate asset(s) or property(ies), the notification stated. "In regulation 2, in sub-regulation (1), clause (zm) shall be substituted with the following, namely -"


This means that an SM REIT will be able to raise money under the arrangement, starting at ₹50 crore, by issuing units to at least 200 investors, to be used for the purchase and management of real estate assets or buildings.


On November 25 of last year, SEBI accepted the changes.


Additionally, fractional ownership of rental real estate assets—including ultra-luxury second residences across the nation—is anticipated to become possible as a result of this.

Currently, they require ₹500 crore in asset base. They combine investor funds and allocate them to different commercial real estate projects. They are listed on stock exchanges and resemble shares.


The only three office REITs in India are Embassy Office Parks REIT, Mindspace Business Parks REIT, and Brookfield India Real Estate Trust.


Source: Hindustan Times