Indian real estate companies would be keen to offset the effect of the difference in accounting standards because any reduction in returns to shareholders would affect the price per share sold, and in turn the valuation of the property trust.

Unitech and DLF could not be reached for comment.

Ernst and Young, another accounting firm, declined to comment, saying it would conflict with the work it is doing for a client.

Indiabulls, which raised S$262 million from its Singapore offering, adopted a complex cross-ownership and shareholding structure to reduce its Reit tax liability, involving the creation of two SPVs in Mauritius--one of which is wholly owned by the Singapore entity--and one in India.

The depreciation provision kicks in at the level of the Indian SPV that's meant to invest in properties in India, resulting in a reduction in dividends paid to the ultimate owner of the trust--the shareholders in Singapore.

The ownership structure would help the company execute a share-buyback plan.

"In general, share buy-back results in increase of earnings per share of remaining shareholders", said Nitin Khandkar, senior vice-president at Keynote Capitals Ltd.

When a company repurchases its stock, the number of outstanding shares gets reduced, leading to higher earning per share. But given the complex ownership structure, "it needs to be seen how it impacts other shareholders," Khandkar said.

India, meanwhile, is studying the introduction of real-estate mutual funds.

The stock market regulator, Securities and Exchange Board of India (Sebi), in April proposed guidelines requiring such funds to invest a minimum 35% in real estate and the rest in mortgage-backed securities and securities of companies dealing in realty stocks.