Experts Welcome SEBI SM REIT Regulation, Boost Retail Investments at Lower Tickets

The Securities and Exchange Board of India (SEBI) recently introduced comprehensive guidelines for Small and Medium Real Estate Investment Trusts (SM-REITs) aimed at improving liquidity of real estate assets on fractional ownership platforms (FOPs).

These guidelines not only facilitate the introduction of new companies to the stock exchange, but also enable existing companies engaged in the acquisition and management of real estate assets through FOP to migrate their business models to the SM-REIT platform.

Since REITs are already present in the market, the introduction of SM-REITs expands the scope and scale of this sector.

Kunal Moktan of PropShare Capital told CNBC-TV18 that their business has evolved from an unregulated technology platform offering rental real estate assets to retail investors to now falling under SEBI’s regulatory framework due to the new SM-REIT regulations. This transition ensures that their product is fully regulated and can reach a wider audience.

Read here | Sebi push on SM REIT to regularize ₹4,000-crore real estate assets: report

Moreover, the minimum investment has reduced from ₹25 lakh to a regulated ₹10 lakh, which is beneficial for those in the fintech sector. Moktan expressed enthusiasm about these changes, noting that it will attract more retail investors to the platform.

Anshul Jain from Cushman & Wakefield emphasized the attractiveness of the product, noting its ability to provide a stable income stream supported by real assets managed by professionals. He acknowledged that there is some volatility in REIT capital appreciation, partly driven by concerns about the return of office trends and the future of the sector.

However, Jain believes that these problems are decreasing and sees REITs as offering good returns to investors. He anticipates an increase in investment as retail investors become more familiar with the sector.

You can watch the full interview in the attached video