Property consultants line up to become valuer for realty MFs

February 04, 2009

Leading property consultants are interested in applying to the Securities and Exchange Board of India (Sebi) to get the ‘recognised valuer’ status for real estate mutual funds (REMFs), a financial daily reported.

REMFs are mutual fund schemes that invest directly or indirectly in real estate or other permissible assets.

As per Sebi regulations, REMF schemes are required to use the services of two independent and approved valuers having recent experience in the category of real estate asset being valued and use the lower of the two valuations.

“Leading property consultants have shown interest in applying for the recognised valuer status,” said AP Kurian, chairman of Association of Mutual Funds in India (Amfi).

A mutual fund company has to ensure that no real estate valuer continues with the valuation of particular real estate asset for more than two years and that no such valuer values the same asset for a period of at least three years thereafter.

“Valuers have to approach Sebi to get themselves registered. Then the fund house has to select those valuers. That process is still on,” Kurian added.

As per Sebi definition, ‘real estate valuer’ means a qualified valuer of real estate assets, who has been accredited by a credit rating agency and is registered with the market regulator.

Arun Chitnis, manager of marketing & communications at Jones Lang LaSalle Meghraj (JLLM), confirmed his firm’s interest in applying for the valuer status with Sebi. “The company would definitely consider applying for such a status,” Chitnis said.

Another leading property consultant, Cushman & Wakefield (C&W), is in ‘wait-and-watch’ mode and is assessing the market.