Ever since the Securities and Exchange Board of India flagged off its new Real Estate Investment Trust regulations in 2014, property developers and lenders to the sector have rejoiced, while investors have remained unenthused. While developers see REITs as a convenient way for them to offload commercial assets and reduce debt, investors seem to be put off by the governance risks in the asset class and its low liquidity compared to equities or bonds. As returns on REITs depend on the demand and rents for office space, they have also compared poorly to other debt instruments during the economic slump. Recent tweaks proposed in SEBI’s board meet are the latest attempt to revive REITs.
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