Sebi aims to enhance trust in REITs, InvITs
real estate investment trusts (Reits) and infrastructure investment trusts (InvITs) to make them more acceptable to investors. Mint explains: Reits and InvITs function like mutual funds—a sponsor raises capital and invests it in real estate or infrastructure projects. Both are investment pooling vehicles.
A Reit portfolio could comprise office parks or shopping malls, where a major portion is already leased out, while an InvIT could include transport, energy or communication projects. Reits allow smaller retail investors to own a portion of income-generating real estate properties that would otherwise be unaffordable. Similarly, InviTs enable direct investment from individual and institutional investors in infra projects.
Since their launch in 2019, Reits have gained popularity. Despite challenges in the commercial office market, Reits garnered steady rental income during the pandemic. For InviTs, the playing field is much larger.
While IRB InvIT Fund was the first InvIT listed on the stock markets in 2017, Embassy Office Parks Reit was the first real estate investment trust to make a debut in 2019. So far, there have been four Reit listings, and roughly 21 listed and unlisted InvITs. At the beginning of 2023, InvITs and Reits registered with Sebi had total assets under management of over ₹3.5 trillion.
Sebi has given board nomination rights to unit holders of InvITs and Reits; changed the minimum unit holding requirement for sponsors of these trusts and introduced the concept of “self-sponsored investment managers". It’s weighing follow-on offers by Reits and InvITs and has cut the time taken for public listing of such investment vehicles to six working days from 12. They are aimed at boosting corporate governance and
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