Realtors’ body CREDAI has praised the new framework for Small and Medium Real Estate Investment Trusts (SM REITs), stating that it will enhance the flow of funds in the Indian property market.
With increasing demand for high-value real estate assets, the Securities and Exchange Board of India (Sebi) has introduced the framework for SM REITs. The regulatory body amended regulations for REITs on March 8, allowing fractional ownership of commercial and residential properties.
Investors can now own a fraction of rent-yielding real estate assets by investing a minimum of Rs 10 lakh.
CREDAI President Boman Irani commented, “SEBI’s decision to amend regulations and set guidelines for SM REITs will significantly increase investments in the Indian Real Estate Sector.”
Irani added, “The increased transparency, measures for investor protection, and the reduced minimum investment threshold to Rs 10 lakh will attract retail investors to participate.”
“With this development, we anticipate accelerated growth in this segment, leading to a more regulated, mature market with heightened awareness among stakeholders,” Irani stated.
Somy Thomas, Managing Director at Cushman & Wakefield, referred to SM REITs as a significant development that can organize small commercial offices and other assets in India, including tier 2 and 3 cities.
“Real estate investment is favored by many Indian families, and this measure institutionalizes it while reducing risks to some extent,” Thomas noted.
Housing.Com CEO Dhruv Agarwala stated that SEBI’s introduction of norms on fractional ownership in real estate is a pivotal moment for India’s investment landscape.
“SEBI’s progressive regulations will democratize access to real estate assets, fostering diversified portfolios for investors and maximizing returns while mitigating risks,” Agarwala said.
“By allowing investors to own a portion of valuable real estate without the high price tag of traditional ownership, SEBI’s support of fractional ownership demonstrates regulatory adaptability to evolving investor preferences,” Agarwala added.
FOIP CEO and Founder Aankush Ahuja highlighted the benefits for investors, including uniformity, investor protection, fairness, transparency, and access to dispute resolution mechanisms. The regulation of fractional ownership under this framework will cover both commercial and residential properties, enhancing investor protection, he noted.
Sudeep Chandran, Founder and COO of YOURS (a platform for Fractional Ownership of Luxury second homes), mentioned the growing interest in co-ownership of luxury properties. “The recent guidelines on SM REITs will further deepen the fractional ownership market,” he stated.
