Additional conditions in case of REIT

99. (1) The investment by a REIT shall be either directly or through an SPV or through holdco. (2) A REIT shall invest only in the following:- (a) real estate, whether freehold or leasehold, in or outside IFSC; (b) real estate related assets; (c) listed or unlisted debt securities or listed shares of local or foreign non-property corporations; (d) government securities; (e) securities issued by a supranational agency; and (f) cash and cash-equivalent items. (3) The investments in case of public offer should be in compliance with the following requirements: (a) at least seventy-five per cent. (75%) of the REIT assets should be invested in income-producing real estate; (b) should not undertake property development activities, unless it intends to hold the developed property upon completion; (c) should not invest in vacant land and mortgages except for mortgage-backed securities: Provided that this requirement shall not apply to any land which is contiguous and extension of an existing project being implemented in stages; (d) the total contract value of property development activities undertaken and investments in uncompleted property developments should not exceed ten per cent. (10%) of the REIT assets: Provided that the total contract value of property development activities may exceed ten per cent. (10%) subject to a maximum of twenty five per cent. (25%) of the REIT assets only if: (i) the additional allowance of up to fifteen per cent. (15%) of the REIT assets is utilised solely for the redevelopment of an existing property that has been held by it for at least three (3) years and which the REIT will continue to hold for at least three (3) years after the completion of the redevelopment; and (ii) it has obtained specific approval of the unit holders. (e) for investments in debt securities or listed shares of local or foreign non-property corporations, or government securities or securities issued by a supranational agency, or cash or cash-equivalent items, not more than five per cent. (5%) of the REIT assets can be invested in any one issuer's securities or any one manager's funds; and (f) should not derive more than ten per cent. (10%) of its revenue from sources other than: i. rental payments from the tenants of the real estate held by it, or Explanation.- rental payments include income that is ancillary or incidental to the leasing of real estate such as income from use of signage space and advertising contributions by tenants; ii. interest, dividends and other similar payments from permissible investments. (4) The investment restrictions and requirements under clauses (d) and (e) of sub-regulation (3) are applicable at the time of entering into the transactions. (5) If the investment conditions specified under clauses (a) and (f) of sub-regulation (3) are breached on account of market movements of the price of the underlying assets or securities or change in tenants or expiry of lease or sale of properties, the investment manager shall inform the same to the trustee and ensure that the conditions as specified in these regulations are satisfied within six (6) months of such breach: Provided that the period may be extended by another six (6) months subject to approval from unit holders. (6) The investments in case of private placement should be in compliance with the following requirements:- (a) At least eighty per cent. (80%) of the value of the REIT assets should be invested in eligible real estate properties either directly or through holdcos or through SPVs; (b) Un-invested funds may be invested in: (i) listed or unlisted debt of companies or body corporate in real estate sector: Provided that this shall not include any investment made in debt of the holdco and/ or SPV(s); (ii) equity shares of listed companies which derive not less than eighty per cent. (80%) of their operating income from real estate sector; (iii) government securities; (iv) securities issued by a supranational agency; and (v) money market instruments, liquid mutual funds or cash equivalents.