Regulation 21 - Valuation of assets - Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014

Valuation of assets. 21. (1) The valuer shall not be an associate of the sponsor(s) or manager or trustee and shall have not less than five years of experience in valuation of real estate. (2) Full valuation includes a detailed valuation of all assets by the valuer including physical inspection of every property by the valuer. (3) Full valuation report shall include the mandatory minimum disclosures as specified in Schedule V to these regulations. (4) A full valuation shall be conducted by the valuer atleast once in every financial year: Provided that such full valuation shall be conducted at the end of the financial year ending March 31st within three months from the end of such year. (5) A half yearly valuation of the REIT assets shall be conducted by the valuer for the half-year ending on September 30 for incorporating any key changes in the previous six months and such half yearly valuation report shall be prepared within forty five days from the date of end of such half year. (6) Valuation reports received by the manager shall be submitted to the designated stock exchange and unit holders within fifteen days from the receipt of such valuation reports. (7) Prior to any issue of units to the public and any other issue of units as may be specified by the Board, the valuer shall undertake full valuation of all the REIT assets and include a summary of the report in the offer document: Provided that such valuation report shall not be more than six months old at the time of such offer: Provided further that this shall not apply in cases where full valuation has been undertaken not more than six months prior to such issue and no material changes have occurred thereafter. (8) For any transaction of purchase or sale of properties, 1 [ whether directly or through holdco and/or SPVs,]- (a) if the transaction is a related party transaction, the valuation shall be in accordance with regulation 19; (b) if the transaction is not a related party transaction,- (i) a full valuation of the specific property shall be undertaken by the valuer; (ii) if ,- (1) in case of a purchase transaction, the property is proposed to be purchased at a value greater than one hundred and ten per cent. of the value of the property as assessed by the valuer; (2) in case of a sale transaction, the property is proposed to be sold at a value less than ninety per cent. of the value of the property as assessed by the valuer, approval of the unit holders shall be obtained in accordance with regulation 22. (9) No valuer shall undertake valuation of the same property for more than four years consecutively: Provided that the valuer may be reappointed after a period of not less than two years from the date it ceases to be the valuer of the REIT. 2 [***] (11) In case of any material development that may have an impact on the valuation of the REIT assets, then manager shall require the valuer to undertake full valuation of the property under consideration within not more than two months from the date of such event and disclose the same to the trustee, investors and the Designated Stock Exchanges within fifteen days of such valuation. (12) The valuer shall not value any assets in which it has either been involved with the acquisition or disposal within the last twelve months other than such cases where valuer was engaged by the REIT for such acquisition or disposal. ************** NOTES:- 1 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 2 Omitted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2017, w.e.f. 15.12.2017. Prior to its omission, the sub-regulation read as follows: (10) Any valuation undertaken by any valuer shall abide by international valuation standards and valuation standards as may be specified by Institute of Chartered Accountants of India (ICAI) for valuation of real estate assets: Provided that in case of any conflict, standards specified by ICAI shall prevail.