Securities and Exchange Board of India (SEBI) has notified micro-REITs regulations to boost transparency and investments in the real estate sector. Micro-REITs refer to smaller-sized real estate investment trusts. The regulations will facilitate smaller REITs by allowing them to raise funds through public issues of up to ₹15 crore. This move aims to provide a structured framework for micro-REITs, encouraging more retail participation in the real estate sector.
The notification of micro-REITs regulations comes at a time when REITs are gaining popularity among investors for their stable and income-generating nature. These regulations will help in expanding the investor base of REITs by creating opportunities for smaller players to enter the market.
SEBI’s move to introduce micro-REITs is expected to increase transparency and enhance investor protection. By setting a limit on the size of public issues, SEBI aims to prevent any potential risks associated with smaller-sized REITs.
The regulations also require micro-REITs to have at least two sponsors, each holding a minimum 15% units of the total outstanding units of the REIT. This provision ensures that the sponsors have a significant stake in the REIT, aligning their interests with those of the unit holders.
Furthermore, SEBI has specified that micro-REITs can have a maximum of 200 unit holders. This will help maintain the ease of governance and ensure better oversight for smaller REITs.
SEBI’s notification of micro-REITs regulations is a significant step in democratizing the real estate market and encouraging more retail participation. Through these regulations, smaller real estate players will have access to an organized platform for raising funds and attracting investments from a wider pool of investors.
In conclusion, SEBI’s notification of micro-REITs regulations is a positive development for the real estate sector. It will provide a boost to smaller REITs by creating a structured framework for their operations. Retail investors will also benefit from increased transparency and a wider range of investment options in the real estate market.
