MUMBAI: India’s market regulator is weighing a proposal that seeks to reduce the minimum investment limit in real estate investment trusts (REIT) to facilitate retail participation in this asset class, especially at a time when New Delhi is keen to monetise some of its income-earning properties.
While the current floor is Rs 50,000, the threshold could even be halved. The government is in consultation with the Securities Exchange Board of India (Sebi) regarding the proposal.
Sebi did not immediately reply to ET s query.
“A proposal has come from market participants and the proposal is currently under consideration. However, a decision is yet to be taken on the size of the reduction and the precise timeline,” a regulatory source, with knowledge of the matter, told ET.
Why have mutual funds increased exposure to REITs and InvITs?
A low interest rates regime, the positive outlook on rental yields post the COVID disruption and an efficient listing framework drew MFs to REITs and InvITs February 15, 2021 / 09:45 AM IST
Over the past few years, mutual funds (MF) have warmed up to investing in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trust (InvITs). Data from ACE MF shows that equity, debt and even multi-asset funds have been investing a small portion of their portfolio – typically up to 10 percent – in these new asset classes.
With the recent public issue of Brookfield India REITs, currently there are five REITs and InvITs available in the exchanges.