Mumbai:
The Indian REITs Association (‘IRA’) has stressed to be a body of integrity and excellence, fostering industry best practices benchmarked to leading global REIT standards.
The Indian Association of REITs, is in talks with the Securities and Exchange Board of India, making a case that Real Estate Investment Trusts (REITs) be classified as equities
Formed under the guidance of the Securities and Exchange Board of India (SEBI) and the Ministry of Finance, it organized its first CEO roundtable here today.
Launched in September 2023, IRA was formed to drive key agenda items such as strengthening the operating and regulatory environment for the Indian REIT market, deepening the capital markets, and increasing investor education programs, among others.
Just like mutual funds allow investors to own a fraction of the company; REITs or real estate investment trusts allow investors to own a fraction of the real estate without purchasing or managing the property. REIT is a company that owns or finances income-producing real estate properties where they pool money from the investors and invest it in real estate projects like workspaces, malls, and others.
If REITs are classified as equities, it would allow for index inclusion wherein a lot of passive flows would come into REITs, said Maiya in the Indian Association of REITs event in Mumbai on March 12. He further said that equities as a product increases the liquidity, which could lead to more trading.
“If REITs are classified as equities they could be included in ETFs, or equity mutual funds, which will lead to more liquidity and REITs could get a wider acceptance,” said Alok Agarwal, MD and CEO of Brookfield India Real Estate Trust. He also said that while Indian indices have not included REITs, globally SP Global and FTSE have already included Indian REITs in their component.
