SEBI Shifts REIT Approval Rule to Votes Cast

The Securities and Exchange Board of India has officially modified unitholder approval thresholds for Real Estate Investment Trusts from three-fourths of total outstanding unitholding value to 75 percent of votes cast, according to Gazette notifications published in October 2026.

The amendment, notified under the SEBI Real Estate Investment Trusts Second Amendment Regulations 2026, removes a persistent governance hurdle in Indian commercial real estate trusts. Previously, key resolutions requiring supermajority approval demanded 75 percent of the entire unitholding base, excluding related parties. Because retail unitholders frequently do not participate in postal ballots or electronic voting, absent unitholders functioned as automatic negative votes, creating institutional gridlock.

Under the amended Regulation 22, resolutions are considered passed if the votes cast in favour are at least three times the votes cast against, excluding interested parties. The change aligns REIT decision-making with corporate voting standards under the Companies Act and makes active participation decisive.

The notification also introduces enabling regulations for Depository Receipts under Regulation 14, allowing Indian REITs to issue cross-border receipts to foreign investors, and mandates explicit cash buyout options for unitholders who formally dissent during sponsor exits.

What to Check

1. Check your depository participant registered email for electronic voting notices from NSDL or CDSL ahead of annual or extraordinary REIT meetings.
2. Verify whether upcoming unitholder resolutions involve sponsor exits, related-party acquisitions, or borrowing limit increases that trigger formal dissent rights.
3. Review your trust's unitholding distribution to identify institutional ownership concentration and historical voting participation rates.

Have you participated in electronic voting for Indian REITs? Share your governance observations on the Vantage forum.