India is poised to welcome foreign investors to participate in real estate investment trusts and infrastructure investment trusts.
India’s Securities and Exchange Board on Friday proposed allowing non-Indian investors and qualified institutional buyers to get involved with REITs and InvIT, Reuters reported. The move is purportedly designed to increase capital inflows into these sectors.
Under the floated change, strategic investors would be required to invest at least 5 percent and up to 25 percent of the total offer size in REITs and InvITs. Individuals, body corporates and family offices won’t be allowed to invest as strategic investors.
The country’s Securities and Exchange Board’s current definition of a strategic investor does not include investors such as public financial institutions, insurance funds, provident funds and pension funds, which also invest in parts of REITs and InvITs. As a result, REITs and InvITs aren’t able to raise capital from them as strategic investors.
The proposal in India follows a green light by the government of Saudi Arabia, which will allow non-Saudi residents to invest in properties in Riyadh and Jeddah starting next year, Forbes reported.
The Saudi Cabinet approved the legislation earlier this month allowing foreign individuals, companies, non-profit organisations and investment entities to own or hold real rights over property across designated zones in the country.
Those investors will have the rights of ownership, leaseholds, usufruct and other real estate interests, though they’ll still be subject to certain restrictions based on location, property type and specific usage, The Economic Times reported. Non-Muslim buyers will be barred from taking property in Mecca and Medina.
Foreign buyers in Saudi Arabia will likely be able to take part in pre-built sales of condos and villas, much like how non-United Arab Emirates residents grab properties in Dubai. It remains to be seen just what developers will launch marquee projects like those found in the UAE.
India’s Securities and Exchange Board is seeking comments on its REIT and InvIT proposals by Aug. 22.
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