One might think that the Asian Public Real Estate Association (Aprea) setting up a chapter in India last month is a precursor to imminent developments in the country's real-estate investment trust (Reit) market.
But there doesn't appear to have been much progress on putting a Reit framework in place since early 2008, when draft rules were issued by the Securities and Exchange Board of India (Sebi).
Singapore-based Aprea chief executive Peter Mitchell says there's no indication it will change any time soon. "Reits still seem to be off the agenda in India," he says. "I don't think Sebi has a timescale for them yet -- which is disappointing for us."
In times of a downturn in property markets elsewhere, the introduction of a Reit framework has acted as a catalyst for the market to help get real estate markets working again, Mitchell says: "Rather than putting them on the backburner, we'd have liked to see the process accelerated."
Aprea made comments on the draft rules issued by Sebi in early 2008, along with a number of other organisations, says Mitchell, but it seems no progress has been made since then.
The association also ran a real-estate funds conference in Mumbai in September 2008, in which Sebi was involved.
But shortly thereafter, in early 2009, Sebi made clear that Reits would not be a priority. Sebi officials did not reply to AsianInvestor's requests for comments by press time.
"We think that was a reaction to the crisis and downturn in real-estate markets in India," says Mitchell, "But, in our view, not the right reaction."
Asked if he felt the development of a Reit market has been hindered by the relative illiquidity and opacity of the Indian property market, Mitchell says: "I don't believe that is hindering the set-up of a Reit regime. They are the kinds of things that investors would factor in."
The draft from 2008 was flawed, however, and market participants would not want to see it adopted wholesale. The formation of the Aprea chapter in Mumbai is meant to lobby for a well-constructed Reit law.
Aprea's members have also asked the body to set up in China.
"[The China chapter] is a work in progress," says Mitchell. "We would like it to happen as soon as possible, but there are a couple of issues we're working through. We have a lot of members based in China that are keen to see a chapter develop there." He says it's feasible to expect to see one set up this year.
As for other markets in the region, Aprea has been involved in developing Reit regimes in both the Philippines -- where a framework is now in place -- and Thailand, where a regime is being developed.
"We hope to see economies such as Malaysia, the Philippines and Thailand develop strong public real-estate markets," he says. "As for the Thai proposals, we have made comments, and there is a fair way to go. But we're very encouraged by the direction [that market is] taking."