Hindenburg claims ‘baseless and misleading’: Indian REITs Association

Since the introduction of REIT regulations in 2014, India has established a strong and transparent regulatory framework that aligns with global best practices. Developed in consultation with all market participants, this framework ensures the highest levels of investor protection for both: domestic and international institutional investors, as well as retail investors, it said in a statement on August 12.

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The sector’s remarkable growth has drawn significant interest and participation from prominent global institutional investors. Their participation not only strengthens the trust and credibility of India’s financial system but also provides investors with a dependable and transparent avenue to engage in the country’s expanding real estate market, it said.

What are REITs?

REITs are investment vehicles that own, operate and manage a portfolio of income-generating property for regular returns. REIT-able properties in India include commercial assets ― primarily office spaces ― that can generate steady rental income.

They operate like mutual fund units or shares. REITs have to be listed on the exchanges and traded like securities. Small investors can buy units of REITs from both the primary and secondary markets, just as they buy shares or mutual fund units.

Currently, there are four listed REITs on the Indian stock exchanges, collectively managing assets worth over ₹1,40,000 crores and serving more than 240,000 unitholders. These REITs have distributed over ₹18,000 crores, with the market capitalization of this rapidly growing asset class reaching approximately ₹80,000 crores, the statement said noted.

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The IRA commends SEBI and its leadership for crafting a “rigorous regulatory environment” that includes comprehensive periodic reporting requirements, mandatory independent valuations, and strict governance standards, it added.

The Indian REITs Association counts Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, and Nexus Select Trust as the founding members of the Indian REITs Association.

The Association’s statement came after the Hindenburg report on August 10 alleged that recent amendments to Sebi’s REIT Regulations 2014 were made to benefit a specific multinational financial conglomerate. In this regard, the markets regulator stated that Sebi (REIT) Regulations, 2014 has been amended from time to time.

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Hindenburg’s new report has raised questions about the SEBI chairperson Madhabi Puri Buch promoting real estate investment trusts as a promising asset class without disclosing that her husband Dhaval Buch is now an adviser to Blackstone Inc, which has sponsored two of the four listed REITs in India.