RBI opens bank lending to REITs, cuts borrowing costs 50-70 bps from October 1
RBI's new framework allows banks to lend directly to SEBI-registered REITs and InvITs, capped at 49% of asset value. Effective October 1, the move could lower borrowing costs by 50-70 bps, benefiting mall-owner Nexus Select Trust and office REITs like Embassy, Brookfield, and Mindspace. Cheaper long-term funds support retail real estate expansion.
What happened
Nexus Select Trust · RBI now allows banks to lend directly to SEBI-registered REITs and InvITs, capped at 49% of asset value, effective October 1. Lower
Key facts
- 80% underlying assets
- 49% asset value cap
- 50-70 bps cheaper
- 5 listed REITs
- October 1 effective
Why this matters
Lower REIT borrowing costs widen the bid-ask for retail and office assets, opening a window to monetize owned real estate via sale-leaseback or REIT contribution at tighter cap rates.