Equity tag for REITs may boost new launches, deepen market

The Securities and Exchange Board of India's (Sebi's) decision to give equity status to real estate investment trusts (REITs) is expected to encourage developers and sponsors to launch new REITs, as it would broaden investor participation, and improve liquidity and valuations, said industry watchers and senior executives in the sector.

- PRACHI PISAL

Industry experts expect the move would deepen the REIT market. The Indian REITs Association is hopeful that stock exchanges will revise index eligibility norms to enable REIT inclusion. Earlier, the instruments were classified as hybrids.

Quaiser Parvez, chief operating officer of the most recent REIT, Blackstone-backed Knowledge Realty Trust (KRT), said the move will improve trading volumes and price discovery. "Pathways to equity index inclusion will attract passive and active inflows, further deepening liquidity. Stronger market access and higher investor demand will also encourage developers and sponsors to launch new REITs, expanding the asset base from offices into logistics, retail, and data centres," Parvez explained.