To support real estate investment through Real Estate Investment Trust funds(REITs), the SECP has introduced a new public-private partnership (P3) model within REITs, in addition to a complete restructuring of the regulatory framework for REITs.
The changes have shifted the control structure from approval-based to disclosure-based, reducing barriers to entry for new REITs, making REITs competitive in the unorganized sector, leading to the promotion of formal real estate projects in the country. The regulations were finalized after extensive consultation with all stakeholders with a vision to bring about changes in line with domestic market conditions and to synchronize with globally recognized standards.
The revised framework clearly distinguished between Conventional REITs and infrastructural REITs categories, ie Non-PPP REITs (for conventional projects) and PPP REITs (for P3 infrastructure projects). REIT Management Companies (RMCs) may seek development, leasing or hybrid options under both of these classifications.
In addition, a number of control approvals and document submission requirements have been streamlined. The REIT Scheme can invest in real estate, either directly or by acquiring a shareholder in the company (SPV model) that owns the real estate.
The infrastructure REIT model under P3 provides a viable solution for streamlining investment for the country’s growing infrastructure needs.
The updated Public-Private Partnership Guidelines for Real Estate Investment Trusts can be read here:
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