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With the new rules of SEBI, mutual funds and SIFs will now be able to invest in REITs like equity, which will make it easier for common investors to take stake in mall-office buildings. This new rule was issued on 31 October 2025 and will come into effect from 1 January 2026. With this, it will become very easy for common investors to take stake in good mall-office buildings with small amounts and get regular income like rent.
SEBI has taken a big decision to make investment in real estate in India easier. Now investments made in Real Estate Investment Trusts (REITs) by Mutual Funds and Specialized Investment Funds (SIFs) will be treated as equity instruments. This means that now these funds will be able to invest more money in REITs than before.
This new rule was issued on 31 October 2025 and will come into effect from 1 January 2026. With this, it will become very easy for common investors to take stake in good mall-office buildings with small amounts and get regular income like rent.
This change will happen for mutual fund investors
SEBI said that this change has been made so that mutual funds and other funds can now easily invest more money in REITs. Earlier, REITs were not counted in the category like equity, hence many funds were not able to invest in them. Now when people are increasing interest in property related investments, this new rule will open the way for funds and common investors will also get a chance to earn good money.
If mutual funds and special funds invest money in REITs from 2026, it will be considered like investing in shares. This means that now these funds will be able to invest as much as they want in REITs. With this, the share of real estate in equity funds will also increase and common investors will be able to get good returns and regular income like rent by investing small amounts in home-shop-office properties. Overall, investing in real estate will now become easier and cheaper.
Investing in REITs now easier
Let us tell you that the first important thing related to this is that only REITs will now get share-like status, InvITs i.e. Infrastructure Trusts will still remain in the hybrid category. This means that investment in REITs will now become easier, but in InvITs involving infrastructure projects like roads and bridges, the old rules will still apply.
The second important thing is that the REITs units which are lying in debt funds till December 31, 2025, there is no need to sell them immediately, they will operate as per the old rules. Nevertheless, SEBI has asked mutual fund companies to gradually withdraw these units from debt funds, so that investors do not suffer loss and there is no shock in the market. Besides, AMFI has also been asked to list the REITs according to their market value, so that everyone has a clear understanding.
Mutual fund companies will now issue a small addendum in their scheme documents, in which it will be written that REITs will now be considered equity. The good thing is that SEBI has clearly said that this is not a big fundamental change. That means investors will neither be given a forced opportunity to exit the fund, nor will any consent be sought.
