Ascendas India Trust Series 005 Notes will list on the SGX on 28 August 2014.

The Singapore-based non-profit real estate organisation Asia Pacific Real Estate Association (APREA) has applauded the Securities and Exchange Board of India (SEBI) for releasing its final regulations on REITs and InvITs but calls for greater clarity on tax rulings.

“The market can now weigh up the opportunities presented by India’s new real estate and infrastructure trust regimes,” said APREA CEO, Peter Verwer. “SEBI listened closely to industry and has modified several aspects of its draft rules, which are now more business friendly.”

“By attracting more funds to India’s infrastructure and real estate sectors, REITs and InvIT’s can spur economic development, create more jobs and generate retirement nest eggs for India’s citizens”, said APREA in an official statement.

However, APREA said tax clarity for REITs and InvITs was a critical issue discussed by summit delegates.

“A significant stumbling block remains the tax treatment of REITs and InvIT’s,” Verwer said. “While we applaud the Ministry of Finance for its REIT/InvIT frameworks, further consideration of proposed tax rules is needed, particularly in relation to dividend distribution tax at SPV level and capital gains tax on sales of REIT units by sponsors.”

The impending entry of REITs for the very first time into the Indian market is expected to inject much needed liquidity into the cash-strapped commercial real estate sector in the country.

Currently investors rely on listed real estate securities such as Ascendas India Trust to get into the Indian market.
Currently investors rely on listed real estate securities such as Ascendas India Trust to get into the Indian market.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.