SEBI notifies micro-REITs regulations; move to boost transparency, investments
Sebi) on Friday notified the regulations to govern small and medium real estate investment trusts (SM-REITs) of income generating and completed properties that may include commercial assets, rental housing, warehousing, and hotels among others.
The introduction of regulations is set to enhance investor trust, broadening the embrace of the growing asset category. This effort is expected to offer vital backing to real estate developers, creating an extra opportunity to capitalize on assets and inject essential liquidity into the industry.
While most of the regulations are in line with the draft guidelines that were issued in November, the capital market regulator has introduced a few additional measures related to leverage, minimum subscribers, and higher capital requirement for investment managers of SM-REITs.
“The new regulations are progressive and have the potential to change the income yielding assets market in India. With the stringent governing standards, eligibility criteria and minimum capital requirement of Rs 20 crore for investment manager and 5% commitment in every SM REIT, we hope that this alternate asset class will get robust response from investors,” said Anuranjan Mohnot, MD, Lumos Alternate Investment Advisors.
The minimum subscription size for MSM REIT scheme units will be Rs 10 lakh and treated as one unit. The micro-REITs will be able to list with an asset value of at least Rs 50 crore and maximum of Rs 500 crore. The SM REITs will also be able to create separate schemes for owning realty
