RBI allows banks to lend directly to REITs, boosting real estate financing

• RBI permits banks to directly lend to Real Estate Investment Trusts (REITs) with safeguards, improving financing access for the real estate sector.
• The decision aligns with existing rules for Infrastructure Investment Trusts (InvITs) and aims to support financing flows while maintaining prudential norms.
• Indian REITs Association welcomes the move, stating it provides a stable, long-term funding source and expands fund-raising avenues for income-generating real estate.
• Mindspace Business Parks REIT MD and CEO, Ramesh Nair, expects improved credit availability, financial stability, and access to long-term funding (10+ years) for REITs.
• The new framework is anticipated to enhance financial flexibility, support portfolio expansion, and institutionalize India’s commercial real estate sector, with borrowing costs already declining.