A Real Estate Investment Trust (REIT) is a trust registered with SEBI under the REIT Regulations, 2014 that owns income-generating real estate and distributes most of its cash flows to unitholders. It needs a sponsor, manager and trustee, meets minimum asset value and investment conditions, and lists its units. SEBI has also introduced a framework for Small and Medium REITs.
Structure
- Sponsor contributes assets
- Manager runs the REIT
- Trustee holds assets for unitholders
Key conditions
- Minimum asset value
- Majority in completed, revenue-generating assets
- High distribution of net cash flows
- Listing of units
Process
- Set up trust.
- Apply to SEBI.
- Offer document.
- Listing.
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A lighter framework for smaller asset pools with lower thresholds.
Frequently asked questions
Can individuals invest in REITs?
Yes, units trade on stock exchanges.
How are REIT distributions taxed?
Depends on component: interest, dividend or repayment of debt.
What is an SM REIT?
A small and medium REIT with lower asset thresholds.
Can residential projects be in a REIT?
REITs focus on income-generating assets like offices and retail.
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