Sebi pegs minimum REIT investment at Rs 2 lakh
In its recently issued final guidelines for Real Estate Investment Trusts (REITs), the Securities and Exchange Board of India (Sebi) has pegged the minimum investment in REITs at Rs 2 lakh.
The new guidelines imply that an investor with an amount of Rs 2 lakh to invest in the REITs will now be able to enter the realty market; thereby bringing about a welcome change in the real estate arena, which thus far has been a business largely for the moneyed people.
With REITs essentially to be similar to mutual funds, the money which is collected from the investors who are part of an REIT chiefly goes towards investments in property, rather than in the purchase of bonds and stocks.
Since the minimum investment currently required for purchasing residential property or commercial space in a Metro or a Tier-I city is at least Rs 30-40 lakh, Sebi’s move to lower minimum REIT investment to Rs 2 lakh will basically enable retail investors to participate in the realty market.
Noting that the minimum holding could be even lower, at Rs 1 lakh in the secondary market, HDFC Vice-Chairman and CEO Keki Mistry said: “REITs allow even middle income individuals to invest in real estate. Without this, they can’t participate in real estate because of the high entry barrier.”
Source – The Economic Times (Bangalore)
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