India eases rules on Reits

Singapore

INDIA eased rules to allow overseas investments in real estate investment trusts, bringing the country one step closer to as much as US$20 billion of listings.

Reits will be allowed as an eligible financial instrument under the Foreign Exchange Management Act, the government said in a statement on Wednesday. Trusts will be able to access foreign investments, which were prohibited under foreign-exchange rules. The move clears one more hurdle to the introduction of Reits and will help reduce pressure on the banking system to fund the real estate sector. Reits will enable the industry to raise fresh equity, while attracting long-term finance from foreign and domestic investors, the government said.