Can REITs invest in under-construction projects?

Listed REITs primarily invest in completed and rent-yielding assets (80% requirement). Up to 20% can be in under-construction projects, with conditions.

What is the typical security package?

Mortgage of project land + construction; hypothecation of receivables; escrow of buyer collections; pledge of promoter shares; personal guarantee of promoters; assignment of rights under contracts.

How does RERA affect project finance?

RERA mandates 70% of buyer collections in project escrow; lender finance interacts with RERA escrow rules. Documentation must accommodate RERA timelines and escrow.

Real Estate Project Finance

Structured finance and lending advisory for real-estate projects — construction finance, mezzanine, NCDs, REITs, AIF investments, and exit financing.

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Overview

Understanding Real Estate Project Finance

Real estate project finance encompasses the full spectrum of debt and equity financing for development projects — bank construction finance, mezzanine debt, NCDs (Non-Convertible Debentures), structured equity, AIF investments, REIT-led acquisitions and exit financing. Each instrument has distinct regulatory, tax and security implications. Our project finance team works for developers, lenders, AIFs, REITs and offshore investors. We structure transactions to optimize gearing, security creation (mortgage, hypothecation, escrow, share pledge, personal guarantees), drawdown mechanics, financial covenants, and exit / refinancing options. Regulatory considerations span SARFAESI, NBFC Regulations, AIF Regulations, REIT Regulations, FEMA (for cross-border financing), GST and stamp duty optimization. We integrate these with the developer's construction timeline, RERA compliance and downstream sale strategy.

Why Legal Door

Built for Outcomes, Trusted Pan-India

Specialist lawyers, transparent pricing and end-to-end execution from first call to final order.

Multi-Instrument Capability

Bank loans, NCDs, mezzanine, structured equity, REITs — single team across instruments.

Lender & Borrower Experience

Acted for both — gives realistic negotiation perspective.

Cross-Border Structuring

FEMA-compliant inbound investment from foreign banks, AIFs, sovereign wealth funds.

Default & Restructuring

Where projects face stress — restructuring, IBC, SARFAESI managed.

What We Cover

Key Highlights

Bank construction finance documentation

NCD and structured-debt issuance

Mezzanine and last-mile finance

AIF investment structuring

REIT-led acquisition and exit

Inter-creditor arrangements (multiple lenders)

Security creation — mortgage, hypothecation, escrow, share pledge

CERSAI, ROC and sub-registrar filings

Drawdown mechanics and financial covenants

Default, restructuring and IBC pathways

Our Process

How We Help You

A straightforward, transparent path from first call to resolution.

1Term Sheet

Capture key commercial terms — quantum, tenor, pricing, security, milestones.

2Diligence

Lender-side title, project, RERA, environmental, regulatory diligence.

3Documentation

Loan agreement, security documents, escrow, inter-creditor (where multi-lender).

4Security Creation

Mortgage, hypothecation, share pledge, CERSAI / ROC filings.

5Drawdown

Construction-stage drawdowns linked to architect / engineer certifications.

6Repayment / Exit

Repayment from sales / refinance / take-out finance.

Legal Framework

Applicable Laws & Regulations

Key statutes, rules and judicial precedents that govern this service.

SARFAESI Act, 2002

Enforcement of secured interests.

Companies Act, 2013 — Sections 71, 77

Debenture issuance and charge filings.

AIF Regulations, 2012

Alternate Investment Funds for real estate.

REIT Regulations, 2014

Listed REIT framework.

FEMA, 1999

Cross-border financing compliance.

Avoid These Mistakes

Common Pitfalls

Costly errors we routinely help clients fix — or better, avoid altogether.

Inadequate Security

Equitable mortgage without CERSAI registration is enforceable but evidentially weaker; insist on registered or registered-equitable.

No Inter-Creditor

Multi-lender deals without ICA invite priority disputes at default.

RERA / Construction Risk

Lender exposure to RERA penalty / project delay must be mapped and ringfenced.

Personal Guarantee Issues

Promoter PG, while common, has IBC / family-property implications post-default.

FAQs

Common Questions

Everything you need to know before you begin

Subordinate debt typically priced higher than senior bank debt, often with equity-like features (warrants, profit share). Used for last-mile financing or filling gaps between senior debt and equity.

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Related Services

RERA Registration & Compliances

Sell / Purchase / Development of Land

CERSAI Verification

FDI in Real Estate

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