India needs to change tax rules to make Reits attractive

Mumbai

THE Indian government has announced rules for setting up real estate investment trusts, vehicles that may spur US$20 billion of property development. None of the money will be spent unless the country's tax code is revised.

"Reits cannot take off in India until changes are made in the tax regime," Anshuman Magazine, chairman of CBRE South Asia, said. "Until these issues are resolved, there isn't much incentive for developers to take the trust route."

Reits will provide a new source of funds to debt-laden Indian developers to construct malls and office buildings, bolstering Prime Minister Naren…