Sebi nod for small, medium REITs to boost investments and liquidity
Sebi) decision to create a regulatory framework for the facilitation of small and medium real estate investment trusts (SM REITs) is expected to boost participation of retail investors, institutionalise the segment, and encourage greater capital influx from both domestic and offshore investors.
The establishment of regulation is poised to bolster investor confidence, expanding acceptance for the burgeoning asset class. This initiative is anticipated to provide crucial support to realty developers, offering an additional avenue to monetize assets and infuse much-needed liquidity into the sector.
«With the approval of Micro-REIT guidelines, finally we will soon have a new asset class available to investors to provide secured and stable returns even in a small real estate asset as low as Rs 50 crore,» said Anuranjan Mohnot, MD, Lumos Alternate Investment Advisors.
According to him, the new regulation has provided more clarity on the regulatory framework for raising money from the public at large outside Alternate Investment Fund (AIF) with due accountability and skin of the investment manager in the entire scheme.
While the finer details are awaited, checks and balances covered in the draft paper released by the regulator in May is likely to make way in the regulations.
«SEBI's move is a strong testament to the trust of the regulator on this new-age investment avenue and it further reinforces our belief in the model.
India has around 800 million sq ft of Grade A office space with a steadily rising demand. The regulator's move will provide significant impetus to investor confidence and allow them to explore opportunities in the CRE space in much more depth,» said Shiv Parekh, Founder and CEO, hBits.
The micro-REITs
