INVESTMENT CONDITIONS AND DISTRIBUTION POLICY :
• The Investment by a REIT shall only be in SPVs or properties or securities or TDR in India and the investment strategy as detailed in the offer document as may be amended in accordance with these regulations.
• The REIT shall not invest in vacant land or agricultural land or mortgages other than mortgage backed securities However, this shall not apply to any land which is contiguous and extension of an existing project being implemented in stages.
• The REIT may invest in properties through SPVs subject to the following,-
(a) no other shareholder or partner of the SPV shall have any rights that prevents the REIT from complying with the provisions of these regulations;
(b) the manager, in consultation with the trustee, shall appoint not less than one authorized representative on the Board of directors or governing board of such SPVs;
(c) the manager shall ensure that in every meeting including annual general meeting of the SPV, the voting of the REIT is exercised subject to provisions of Companies Act, 2013.
• Not less than 8% of value of the REIT assets shall be invested proportionate to the holding of the REITs in completed and rent generating properties subject to the following,-
(a) If the investment has been made through a SPV, whether by way of equity or debtor equity linked instruments or partnership interest, only the portion of direct investments in properties by such SPVs shall be considered under this sub-regulation.
(b) If any project is implemented in stages, the part of the project which is completed and rent-generating shall be considered under this sub-regulation and the remaining portion including any contiguous land.
• Not more than 20% of value of the REIT assets shall be invested proportionate to the holding of the REITs in assets other than as provided above and such other investment shall only be in,-
• Not less than 75% of the revenues of the REIT and the SPV, other than gains arising from disposal of properties, shall be, at all times, from rental, leasing and letting real estate assets or any other income incidental to the leasing of such assets.
• Not less than 75% of value of the REIT assets proportionately on a consolidated basis shall be rent generating.
• A REIT shall hold at least two projects, directly or through SPV, with not more than 60% of the value of the assets, proportionately on a consolidated basis, in one project.
• Conditions specified in above shall be monitored on a half-yearly basis and at the time of acquisition of an asset. If such conditions are breached, then manager shall inform the same to the trustee and ensure that the conditions as specified in this regulation are satisfied within six months of such breach. Further, the period may be extended by another six months subject to approval from investors in accordance with these regulations.
• A REIT shall hold any completed and rent generating property, whether directly or through SPV, for a period of not less than 3 years from the date of purchase of such property by the REIT or SPV.
• For any sale of property, whether by the REIT or the SPV or for sale of shares or interest in the SPV by the REIT exceeding 75% of the value of REIT assets in a financial year, the manager shall obtain approval from the unit holders in accordance with these regulations.
• A REIT shall not invest in units of other REITs.
• A REIT shall not undertake lending to any person. However, investment in debt securities shall not be considered as lending.
• With respect to investment in lease hold properties, the manager shall consider the remaining term of the lease, the objectives of the REIT, the lease profile of the REIT’s existing real estate assets and any other factors as may be relevant, prior to making such investment.
• In case of any co-investment with any person(s) in any transaction,-
(a) The investment by the other person(s) shall not be at terms more favourable than those to the REIT;
(b) The investment shall not provide any rights to the person(s) which shall prevent the REIT from complying with the provisions of these regulations;
(c) The agreement with such person(s) shall include the minimum percentage of distributable cash flows that will be distributed and entitlement of the REIT to receive not less than pro rata distributions and mode for resolution of any disputes between the REIT and the other person(s).
• With respect to distributions made by the REIT and the SPV,-
(a) Not less than 90% of net distributable cash flows of the SPV shall be distributed to the REIT in proportion of its holding in the SPV subject to applicable provisions in the Companies Act, 2013 or the LLP Act, 2008;
(b) Not less than 90% of net distributable cash flows of the REIT shall be distributed to the unit holders;
(c) Such distributions shall be declared and made not less than once every six months in every financial year and shall be made not later than 15 days from the date of such declaration;
(d) If any property is sold by the REIT or SPV,-
(i) If the REIT proposes to reinvest sale proceeds into another property, it shall not be required to distribute any sale proceeds from such sale to the unit holders; and
(ii) If the SPV proposes to reinvest sale proceeds, if any, into another property, it shall not be required to distribute any sale proceeds from such sale to the REIT;
(iii) If the REIT or SPV proposes not to invest the sales proceeds made into any other property, it shall be required to distribute not less than 75% of the sales proceeds in accordance with clauses (a) and (b);
(e) If the distributions are not made within 15 days of declaration, then the manager shall be liable to pay interest to the unit holders at the rate of 15% per annum till the distribution is made and such interest shall not be recovered in the form of fees or any other form payable to the manager by the REIT.
• No schemes shall be launched under the REIT.
• SEBI may specify any additional conditions for investments by the REIT as it deems fit.