US based PE giant Blackstone, and Bengaluru-based developer-investor RMZ Corp could be the first ones roll out their real estate investment trust (REIT), after the FM cleared the final barrier on DDT (dividend distribution tax) in such bodies. REITs are comparable to mutual funds, and can be listed and traded on stock exchanges. A majority of their income has to be distributed as dividend.
In the Union Budget 2016, the finance minister had said the distribution made out of income of a Special Purpose Vehicle to REITs and infrastructure investment trusts (InvITs) did not attract dividend distribution tax (DDT).
Embassy and Blackstone had contemplated floating a $2-billion REIT but did not go ahead owing to issues with the regulations.
Raj Menda, executive chairman at RMZ mentioned that they are looking to list in 2017 or beyond. Notably, RMZ is backed by Qatar Investment Authority.
“DDT exemption for REITs is a welcome move and will help commercial assets to be amortised and create wealth for investors,” said Menda, also a member of the Asia Pacific Real Estate Association (Aprea).
Read more: Business Standard
