Sebi issues draft norms for Real Estate Investment Trusts
Oct 11, 2013
Source : The Economic Times

 

MUMBAI: Looking to attract more investments into the capital market, Sebi today proposed listing of Real Estate Investment Trusts (REITs), a popular instrument for raising funds in the realty sector.

Issuing draft norms for REITs, the capital market watchdog said the evolution of such investment vehicles is "crucial" for the rapidly growing real estate industry.

REITs would be allowed to list on stock exchanges through Initial Public Offer (IPO) and can raised funds further through Follow-On Offers, according to the consultation paper and draft norms issued by Securities and Exchange Board of India (Sebi).

"REIT shall be set up as a Trust under the provisions of the Indian Trusts Act, 1882," it said.

However, REITs would not be allowed to launch any schemes.

As per draft rules, only such entities that have at least 90 per cent investment in completed revenue generating projects.

The move is aimed at providing investment avenues for investors by way of trading units of REITs, similar to mutual fund and Exchange Traded Fund structures for stocks, bonds and other securities.

"The REIT shall have parties such as trustee (registered with Sebi), sponsor, manager and principal valuer," it added.

The Trust needs to initially apply for registration with Sebi as a REIT in the specified format. After being satisfied on the eligibility conditions, the regulator would grant registration to it.

According to Sebi, REITs can issue units of their investment schemes through a public offer and list them thereafter on a stock exchange in a way similar to the issuance and listing of shares during an IPO.

Thereafter, the units can be traded on the stock exchange platform just like shares. It further said that listing of units will be mandatory for all REITs.

The regulator said that REIT may raise funds from any investors, resident or foreign. However, initially, till the market develops, it is proposed that the units of REITs may be offered only to HNIs /institutions.

Consequently, it is proposed that the minimum subscription size would be Rs 2 lakh and unit size shall be Rs 1 lakh.

For coming out with an IPO, Sebi said that the size of the assets under 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.

Latest Realty News

Real estate stocks gain on improving liquidity
Oct 11, 2013
MUMBAI: Real estate stocks have been gaining ground ever since the RBI announced measures to ease short-term liquidity. BSE Realty index outperformed the past month, gaining over 3.05% as compared to 1.2% gains on the BSE Sensex. Real estate stocks such as Unitech, DLF, Oberoi Realty gained anywhere between 1-8% the past month.
Realty stocks expected to move up
Oct 11, 2013
DELHI: Stocks of the beaten-down realty sector are expected to move up in the run-up to the results, said analysts. There could be an uptake of about 3-5% in these stocks going forward, they said.
Realtors bet on star power
Oct 11, 2013
DELHI: Deepika Padukone endorsing realty firm Ace Group is the latest entrant in the long list of celebrities and cricketers becoming brand ambassadors for developers, who are all out to attract buyers this festive season.
Realty shares in demand
Oct 11, 2013
MUMBAI: Shares of real estate companies are in demand and trading higher by up to 10% after the market regulator Securities and Exchange Board of India (Sebi) issued draft regulations for setting up real estate investment trusts (REIT) in the country.
Only builders will gain from demolition: Campa Colony society resident
Oct 11, 2013
MUMBAI: Residents of Campa Cola society in Worli are an embittered lot. Not only are they set to lose their apartments, they are upset that the lone beneficiary of the demolition will be the unscrupulous builders or the new builder, who could approach the civic body with fresh building plans.
Why Urapakkam is treading well in rental accommodation segment
Oct 11, 2013
CHENNAI: Located on the GST Road in South Chennai, Urapakkam has been the place IT professionals prefer for rental housing. As a suburb in the Kanchipuram District, Urappakam is located between Vandalur and Guduvancheri. Here are some of the major reasons it holds good prospects.
Realtors upbeat on Hyderabad market
Oct 11, 2013
HYDERABAD: Andhra Pradesh realtors and developers are upbeat on the future ofreal estate in Hyderabad. They claim that now is the best time to buy properties in Hyderabad as prices are expected to shoot up post the bifurcation of the state.
1.9 lakh owners in Hyderabad never paid property tax in 5 years
Oct 11, 2013
HYDERABAD: Nearly 1.90 lakh owners have not been paying property tax for over five years. These property owners together owe over Rs 461 crore, including arrears and interest on it, to the Greater Hyderabad Municipal Corporation (GHMC). Similarly, over three lakh owners of 13.5 lakh properties assessed have not been remitting taxes for over three years.
SEBI floats draft norms for listing Real Estate Investment Trusts
Oct 11, 2013
MUMBAI: The market regulator SEBI has introduced draft regulations related to Real Estate Investment Trusts (REIT). This revives an earlier proposal in 2008 which was not implemented because of difficulties in valuation and reporting of net asset value periodically.
Indian Property to raise $300-m offshore fund
Oct 11, 2013
MUMBAI: Indian Property Advisors Pvt Ltd (IPAL) is planning to raise a $300-million (Rs 1,850-crore) offshore, single-city fund, which would be invested in residential projects across Mumbai. In the second round, the private equity firm would look at raising similar funds for Bangalore and Chennai.

Latest Realty News Of State

Realty Talk's