SEBI to introduce real estate investment trusts soon

22 November 2007

Mumbai: The Securities and Exchange Board of India (SEBI) is in the process of introducing `real estate investment trusts'' (REITs) and will soon come up with the first set of proposals, chairman M Damodaran said.

He was delivering the keynote address at the second capital market summit of the Confederation of Indian Industry (CII) in Mumbai.

"We are also looking at introducing REITs... Consultations with persons that have better understanding of these products have commenced and shortly we are going to write the first set of proposals," Damodaran said.

REITs offer common shares to the public, representing ownership rights in an operating business and give out most of the profits as dividends. REITs also provide easy liquidity to investors as these shares can be bought or sold in stock exchanges.

SEBI, he said, was also in the process of finalising norms for real estate mutual fund (REMF), adding, "The accounting solution for valuation of real estate were being worked out by AMFI and ICAI."

"We will ensure that both the products are made available to the investors and there won''t be any partiality in introducing REMF and REIT," he said.