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REITs to raise short-term debt at lower cost as Sebi allows issue of papers
Capital markets regulator Sebi's decision to allow Real Estate Investment Trust (REIT) to issue commercial papers will help in raising short-term debt at a lower interest cost, according to real estate industry experts.
REIT, a popular instrument globally, was introduced in India a few years ago to attract investment in the real estate sector by monetising rent-yielding assets. It helps unlock the massive value of real estate assets and enable retail participation.
At present, there are three listed REITs -- Embassy Office Parks REIT, Mindspace Business Parks REIT and Brookfield India Real Estate Trust -- on Indian stock exchanges, but all these are of leased office assets.
On Thursday, Sebi allowed emerging investment vehicles, REIT, and Infrastructure Investment Trust (InvIT), to issue commercial papers, subject to certain conditions.
Commercial Paper or CP in market parlance refers to a short-term debt instrument issued by companies to garner funds generally for a time period up
