An Overview of REIT Registration

REIT registration (Real Estate Investment Trust registration) allows individuals and institutions to invest in large-scale, income-generating real estate and construction projects. In India, REIT registration online is governed by the SEBI (Real Estate Investment Trusts) Regulations, 2014. Obtaining a REIT license provides a wider range of investment opportunities in the real estate sector without the need for direct property purchase. It promotes transparency and offers greater liquidity options for investors.

Corporations managing REITs oversee high-value real estate portfolios and mortgages. They lease properties and collect rent, which is then distributed among shareholders as income and dividends. This makes REITs an attractive option for investors looking to park funds and earn steady returns. Worried about whether your company qualifies for REIT registration? Let our experienced experts handle the process for you, making online REIT registration smooth and hassle-free.

Trust under the Indian Trust Act, 1882

Steady Dividend Income

Quarterly Compliance Report must

Regulated by SEBI Regulations 2014

REITS are Transparent

Lower Liquidity Risk

Minimum 100 Shareholders

Scale up your Revenue with REIT Registration in India

Pool your real estate assets, attract institutional investment, and offer investors dividend income through a SEBI-compliant Real Estate Investment Trust (REIT) in India's dynamic market. Go for REIT registration with Enterslice.

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Types of Real Estate Investment Trust Registration

The different types of real estate investment trust registration are as follows:

Equity REIT

Equity REIT

Equity REITs are the most common type of REIT. They own and manage income-generating commercial properties such as offices, malls, and apartments. The income comes mainly from rent and sales of properties, which is then distributed to shareholders as dividends.

Mortgage REIT (mREIT)

Mortgage REIT (mREIT)

Mortgage REITs invest in mortgage loans and mortgage-backed securities. They earn income primarily through interest payments on these loans and distribute it among their shareholders.

Hybrid REIT

Hybrid REIT

Hybrid REITs combine the features of both Equity REITs and Mortgage REITs. They invest in physical properties as well as real estate debt instruments, helping investors diversify across equity and debt.

Private REIT

Private REIT

Private REITs are not registered with SEBI and are not traded on stock exchanges. They are offered only to select investors and usually have lower liquidity compared to public REITs.

Publicly Traded REIT

Publicly Traded REIT

These REITs are registered with SEBI and listed on the stock exchange. Their shares can be freely bought and sold, making them highly liquid; however, they are also exposed to market volatility.

Public Non-Traded REIT (Listed REIT)

Public Non-Traded REIT (Listed REIT)

These REITs are registered with SEBI but not listed on the stock exchange. They provide some investor protections but have lower liquidity since they cannot be traded easily.

Benefits of REIT Registration Online

The benefits of REIT registration online are mentioned below:

Affordable Investment

The SEBI-registered REITs offer affordable and simplified investment opportunities with better stability in comparison to stocks and bonds.

Regular Income Source

Investments in SEBI-registered REITs offer risk-adjusted returns and further assist in generating regular income/ cash flow. Hence, it enables investors to rely on a steady income source in case of high inflation.

Potential for Capital Appreciation

The Real Estate Investment Trusts are trust entities listed on the Stock Exchange. Hence, they are regulated and effectively managed by the Securities and Exchange Board of India, which allows steady potential for capital appreciation over the long term.

Portfolio Diversification

Real estate investment trust registration provides portfolio diversification through frequent investment in real estate without buying a property.

Professional Management

The properties owned by REIT are professionally managed, which ensures smooth operations with no effort on your part to manage commercial real estate.

Dividend Yield

Real estate investment trust registration provides a substantial dividend and interest accruing from the net rental income of the commercial real estate property.

Transparency in Dealing

The SEBI-regulated REIT provides an opportunity to access information on aspects like taxation, ownership, and zoning, making the entire process transparent.

Attractive Investment Instrument

REIT registration provides an attractive alternative investment instrument in the Indian financial markets.

Tax Exemption

The interest income and dividends accrued from a Special Purpose Vehicle (SPV), renting or leasing real estate assets directly owned by the REIT, are exempt from payment of taxation.

Eligibility Criteria for REIT Registration Online

As per Regulation 4 of the SEBI (Real Estate Investment Trusts) Regulations, 2014, the following eligibility conditions must be met for REIT registration online:

Trust Deed

The applicant must register a Trust Deed under the Registration Act, 1908 to authorize REIT activities as per SEBI regulations.

Entities Involved

The sponsors must have at least 5 years of experience in real estate or fund management, the managers must have 5 years of experience in fund or property management, and the trustee must be registered with SEBI under the Debenture Trustees Regulations, 1993.

Net Worth Requirement

The sponsors collectively must have a net worth of at least ₹100 crores (₹20 crores each), while the manager (if a body corporate) must have a net worth or net tangible assets of not less than ₹10 crores.

Asset Base Requirement

The underlying asset base or SPV must hold a value of at least ₹500 crores, or any higher amount as prescribed by SEBI. The minimum asset size for small and medium REITs is ₹25 crores.

Investment Requirement

At least 80% of REIT assets must be invested in completed and income-generating properties, while up to 20% can be in under-construction or non-rent-generating properties.

Holding of REIT Units

For REIT registration in India, sponsor(s) must hold at least 25% of units for the first three years post-listing, then maintain a minimum of 15% thereafter. Each sponsor must hold at least 5% individually, with a maximum of three sponsors allowed.

Issue of Subordinate Units

Sponsors and their associates may issue subordinate units, which carry inferior voting or other rights compared to standard REIT units.

Fit and Proper Criteria

All parties involved must meet the fit and proper criteria laid down under Schedule II of the SEBI (Intermediaries) Regulations, 2008.

Code of Conduct

The REIT and all associated parties must follow the Code of Conduct specified in Schedule IV of the SEBI (Intermediaries) Regulations, 2008.

How to Apply for REIT Registration with Enterslice?

The step-by-step process to apply for REIT Registration with Enterslice expert-led support is as follows:

Filing of Application

Applicants must file an application in Form A or apply for online REIT registration through the SEBI Intermediary Portal, as specified in Schedule I of the SEBI (Real Estate Investment Trusts) Regulations, 2014. We help you file the application.

Fulfil Eligibility Criteria

Applicants must meet the eligibility conditions prescribed under Regulation 7 of the SEBI (Real Estate Investment Trusts) Regulations, 2014.

Payment of Application Fees

Applicants are required to pay the non-refundable application fees as mentioned in Schedule II of the SEBI (Real Estate Investment Trusts) Regulations, 2014.

Furnish Clarification

SEBI may ask the applicants to provide additional information or clarification for processing the application.

Personal Representation

The applicant or their authorized representative may be asked to appear before SEBI for personal representation regarding the grant of registration. Our professionals appear before SEBI on your behalf.

Grant of Certificate of Registration

If all requirements are met and fees are paid, SEBI issues the certificate of registration in Form B to the trust, as per Schedule II.

Structure of Real Estate Investment Trust Registration

The structure of a Real Estate Investment Trust registration comprises three key participants: the sponsor, manager, and trustee. Each of these plays a vital role in the functioning of the REIT and must fulfil the eligibility conditions laid down by SEBI.

Sponsor of Trust

The sponsor is the entity or individual who sets up the REIT and acts on its behalf. To qualify, the sponsor or its associates must have at least five years of experience in real estate development or fund management within the industry. In cases where the sponsor is a developer, at least two projects must have been successfully completed.

A maximum of three sponsors is permitted, each required to hold at least 5% of the REIT’s listed units. Collectively, the sponsors must maintain a net worth of ₹100 crore, while each sponsor individually must have a minimum net worth of ₹20 crore.

Manager

The manager is responsible for the day-to-day operations and overall management of the REIT. Either the manager or its associate must have a minimum of five years of experience in fund management, advisory services, property management, or real estate development. In addition to managing assets and investor relations, the manager ensures compliance with SEBI guidelines and the smooth functioning of the trust. The manager is also required to maintain a net worth of at least ₹10 crore.

Trustee

The trustee acts as a safeguard for investors’ interests and ensures that the REIT functions in accordance with SEBI regulations. Trustees must be companies registered under the SEBI (Debenture Trustee) Regulations, 1993, and must specialize in providing trusteeship services. They are required to have sufficient financial resources, infrastructure, and personnel to carry out their duties effectively. SEBI also reviews their capability through circulars and guidelines to confirm its competence in managing trust-related responsibilities.

Timeline For Real Estate Investment Trust Registration

The department generally requires a timeline of around 2 to 3 months to decide upon the REIT registration application. Have a look over the generalized timeframe required for Real Estate Investment Trust registration in India:

Filing of Application: 3 to 5 Days

It takes around 3 to 5 business days to prepare and file the REIT registration application in the prescribed Form A through the SEBI Intermediary Portal.

Verification of Eligibility & Documentation: 4 to 6 Weeks

SEBI takes around 4 to 6 weeks to review the submitted documents and verify whether the applicant fulfils the eligibility criteria as per SEBI (Real Estate Investment Trusts) Regulations, 2014.

Scrutiny & Clarifications: 2 to 3 Weeks

During this stage, SEBI may seek clarifications, require additional documents, or raise queries, which must be responded to by the applicant within the given timeframe.

Approval & Grant of Certificate: 2 to 3 Weeks

Once SEBI is satisfied with the compliance and documentation, the certificate of registration for REIT is granted within 2 to 3 weeks.

Documents Required for REIT Registration Online

The applicant must submit the following documents/information for REIT registration online as prescribed under Schedule I of the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014.

General information on REIT

Details of trust

Details of Trustee

Business Plan

Investment Strategy

Declaration by Sponsor

Declaration by REIT and parties to REIT

Declaration Statement

Offer Document

Trust Deed

Details of Manager

Details of Sponsor

Details of Regulatory Action (if any)

Taxation Rules for Investors- REIT Registration

The taxation rules applicable to investors earning different types of income from REIT registration are explained below:

  • Taxation of Dividends
    Dividends from REITs are taxable in the hands of investors only if the SPV opted for concessional corporate tax under Section 115BAA. If not, they may be tax-free. The income is added to the total income of the investor and taxed as per the applicable income tax slab rate for the financial year.
  • Taxation of Capital Gains
    Capital gains earned from the sale of REIT units are taxed differently depending on the holding period. If the units are sold within one year from the date of allocation, the gains are treated as Short-Term Capital Gains (STCG) and taxed at 15%. On the other hand, if the units are held for more than one year, they are treated as Long-Term Capital Gains (LTCG), and any gains exceeding ₹1 lakh are taxed at 10%.
  • Taxation of Capital Gains from International REIT Fund of Funds
    In the case of investments in international REIT fund of funds, non-equity taxation rules are applicable. The gains earned from selling such units are taxed as per the holding period. Short-Term Capital Gains are taxed at the investor’s applicable slab rate, while Long-Term Capital Gains are taxed at 20% after availing indexation benefits.

Difference Between REITs and Real Estate Mutual Funds

The difference between REITs and Real Estate Mutual Funds is as mentioned below:

REIT (Real Estate Investment Trusts)

  • A trust, corporation, or association that invests in commercial and income-generating real estate, hotels, and apartments without owning them directly.
  • Provides diversification across various properties and locations.
  • Generates income through rental income and capital appreciation.
  • Distributes a higher proportion of income as dividends to investors.
  • Direct investment in real estate properties or mortgages typically offers better returns during periods of inflation.
  • Highly liquid – units can be traded easily on the stock exchange.
  • Dividends are taxed as per individual income tax slab rates.
  • Moderate risk is involved.
  • Managed by professional real estate managers.

Real Estate Mutual Funds

  • Sectoral mutual funds that invest in companies or projects related to real estate properties.
  • Provides wider diversification by investing in real estate company stocks.
  • Generates income through dividends from real estate companies and capital appreciation.
  • Dividend distribution depends on fund policy and performance.
  • Indirect investment through equity shares of real estate companies.
  • Comparatively less liquid, making it harder to enter or exit holdings.
  • Dividends and capital gains are taxed according to mutual fund taxation rules.
  • Moderate to high risk is involved.
  • Managed by mutual fund managers with expertise in the real estate sector.

Compliance Requirements for REIT Registration

The Securities and Exchange Board of India (SEBI), under the Real Estate Investment Trusts (REIT) Regulations, 2014, prescribes the following compliance requirements for REIT registration:

  • Make Necessary Appointment: The Board must appoint a person responsible for maintaining REIT records and documents to protect investors’ interests.
  • Hold REIT Assets: The trustee is required to hold REIT assets for the benefit of unit holders, as per the Trust Deed and SEBI REIT Regulations, 2014.
  • Reporting and Disclosure: The trustee must ensure that the manager complies with all reporting and disclosure obligations specified by SEBI.
  • Review by Trustee: The trustee must periodically review transactions between the manager and its associates, as well as monitor unit holder complaints and their redressal by the manager.
  • Declaration of Distribution: The trustee is responsible for ensuring the timely declaration and distribution of returns to unit holders, as per SEBI regulations.
  • Manager Convenes Meetings: The trustee must ensure that the manager conducts meetings of unit holders, oversees voting, and declares the outcome.
  • Issue and Allotment of Units: A REIT must make an initial public offer (IPO) of units with an offer size of not less than ₹250 crores.
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Why Trust Enterslice for REIT Registration?

We at Enterslice are proud to offer unmatched expertise and comprehensive services for Real Estate Investment Trust registration. Given below are the reasons why real estate business enthusiasts consider our services for online REIT registration with SEBI:

  • Expert Guidance to Ensure Smooth REIT Registration with SEBI
  • Pioneer in REIT Advisory with Deep Industry Knowledge
  • Proven 99% Success Rate in REIT Registration Approvals
  • End-to-End Support from Application Filing to Post-Registration Compliance
  • Verification of Both Publicly Traded and Non-Traded REITs
  • Detailed Analysis of the Company’s Role in the Capital Appreciation of REITs
  • Post-Registration Compliance Support in Line with SEBI Regulations
  • Avoidance of Delays and Complications through Expert Documentation Handling
  • Comprehensive REIT Registration Services Ensuring 100% Compliance
  • Access to Over 50+ REIT-Specific Experts
  • Post-Registration Support to Ensure Adherence to SEBI’s Disclosure Requirements
  • Transparent Pricing with No Hidden Charges
  • 24/7 Support for All Queries Related to REIT Registration

FAQs on Real Estate Investment Trust registration

To register a Real Estate Investment Trust (REIT), you must file a registration application with the Securities and Exchange Board of India (SEBI) using Form A, along with the required supporting documents. Once submitted, SEBI will review the application for the grant of the certificate of REIT registration.

REITs pool money from various investors to invest in income-generating assets and work like mutual funds. Rental income and interest payments are distributed as dividends among investors.

The main objective of REITs is to generate dividends from capital gains accrued from the sale of commercial property and provide safe, diversified real estate investment opportunities.

REITs generate investment returns through periodic dividends, interest payouts, and capital gains from renting or leasing commercial real estate after deducting management and maintenance expenses.

Investments in REITs are made similarly to Exchange Traded Funds (ETFs) or by directly purchasing units through the stock market.

The Embassy Office Parks REIT, Mindspace Business Parks REIT, and Brookfield India Real Estate Trust are the most popular top-performing REITs in India. Kotak International REIT Fund of Funds is the only top-performing international REIT fund in India.

The applicant generally requires at least 100 unit holders at the time of public issue to start a REIT in India.

Yes, companies with revenue generation capacity, investments in real estate projects, and assets of Rs. 500 crores or more are eligible to start their own REIT in India.

Yes, REITs are listed on the stock exchange, so you can buy or sell REIT units anytime.

Yes, you can directly buy or sell REIT units through REIT companies or in a secondary market established by broker-dealers.

Yes, REITs can make money by investing in diverse real estate properties, including commercial spaces, workspaces, and malls.

The minimum number of shareholders/investors in a REIT is 100.

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