Cabinet approves to allow REITs
The approval is expected to enable foreign investment inflows into the completed rent yielding real estate projects, which is, as of now, prohibited under the FEMA Regulations.
"As a result of this decision, entities registered and regulated under the SEBI (REITs) Regulations 2014 will be able to access foreign investments which as of now are prohibited under the FEMA Regulations. The intent of introducing the instrumentality of REITs is to reduce pressure on the banking system to which the real estate sector looks for funds, free up existing funds of Banks and to encourage construction activities," read a government statement.
REITs while attracting long term finance from foreign and domestic sources including NRIs would make available fresh equity to the sector.
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