New Delhi, Sep 15 (KNN) In a move expected to enhance investment in India’s property sector, the Securities and Exchange Board of India (SEBI) has reclassified Real Estate Investment Trusts (REITs) as “equity” for mutual fund investments.
The change has been made through amendments to the SEBI (Mutual Funds) Regulations, 1996.
Until now, REITs and Infrastructure Investment Trusts (InvITs) were grouped under the “hybrid” category due to their stable cash flows and lower liquidity.
Treating REITs as equity brings them in line with global practices where they are part of equity indices. This is expected to attract greater institutional participation and retail interest.
Industry bodies have welcomed SEBI’s decision. The Indian REITs Association called it a significant milestone for the country’s real estate sector.
Executives from major listed REITs, including Brookfield India Real Estate Trust, Embassy REIT, Mindspace Business Parks REIT, Nexus Select Trust and Knowledge REIT, said the move will help broaden the investor base, improve market liquidity, and draw more foreign and domestic capital.
Analysts noted that the reclassification will make it easier for REITs to be included in stock indices and held by mutual funds, thereby improving visibility and regulatory clarity.
SEBI has, however, retained InvITs in the hybrid category for now, citing their relatively stable income structures and lower trading liquidity.
Currently, India has five listed REITs with combined assets under management (AUM) exceeding USD 2 billion. The segment is projected to expand significantly, potentially doubling to USD 4 billion by 2030, driven by rising demand for commercial and retail real estate.
(KNN Bureau)
