SEBI Tightens REIT Regulations with New Valuation, Reporting, and Public Participation Rules [Read Notification]
SEBI amends the definition of public investors and new valuation timelines, reporting, and cash flow disclosures.
SEBI - REIT - Taxscan
SEBI - REIT - Taxscan
The Securities and Exchange Board of India (SEBI) issued a Notification dated 1st September 2025, announcing the Securities and Exchange Board of India (Real Estate Investment Trusts) (Second Amendment) Regulations, 2025.
These amendments make important changes to the framework governing Real Estate Investment Trusts (REITs), focusing on definitions, disclosure requirements, reporting timelines, valuation norms, and treatment of cash flows.
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Key Highlights of the Amendment
SEBI has revised the definition of “public” investors. “Public” now excludes REIT-related parties such as the sponsor, sponsor group, or manager. But, if such parties participate as Qualified Institutional Buyers (QIBs) in an offer, they may still be treated as public. The sponsor, sponsor group, and manager are permanently excluded from being categorized as public.
On the disclosure side, SEBI has aligned REIT reporting timelines with financial reporting cycles. Instead of being bound by a rigid 30-day submission rule, quarterly updates on fund flows, payments, compliance, and under-construction properties must now be submitted along with quarterly financial results as specified by SEBI. Similarly, valuation reports of REIT assets are now streamlined:
- A full valuation must be carried out as of March 31 each year, to be submitted with the annual financial results.
- A half-yearly valuation as of September 30 must be filed with the September quarter’s financial results.
- In case of any major event affecting REIT asset values, a fresh valuation must be completed within two months of the event and disclosed within 15 days.
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The notification also provides flexibility in cash flow distribution. If a holding company (HoldCo) records negative net distributable cash flows, it may offset this by using inflows from its underlying special purpose vehicles (SPVs). Such adjustments must be disclosed transparently to unitholders, ensuring accountability.
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