Over the past 2-3 years, fractional ownership has become increasingly popular in India. Fractional ownership is a method of property ownership where multiple unrelated parties can share in, and mitigate the risks of, ownership of a high-value asset. Investors who were unable to buy the whole property due to cash limitations could invest in real estate properties via fractional ownership. However, without proper regulations and governance, there was always a question whether such fractional ownership of investments was safe.

The Securities and Exchange Board of India (“SEBI”) issued a consultation paper1 on May 12, 2023, titled ‘Regulatory Framework For Micro, Small & Medium REITs (MSM REITs)’ laying down a proposed regulatory framework for Small and Medium Real Estate Investment Trusts (“SM REITs”) which would make real estate investment more accessible and facilitate fractional ownership platforms (“FOPs”) to be governed under the ambit of SEBI (Real Estate Investment Trusts) Regulations, 2014 (“REIT Regulations”), (“Consultation Paper”). Our detailed analysis of the Consultation Paper can be accessed here.

In a board meeting conducted on November 25, 20232, SEBI approved amendments to the REIT Regulations paving way for a regulatory framework for facilitation of Small and Medium REITs (“SM REITs”). The amendments were notified vide the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2024 on March 08, 20243 (“Amended Regulations”).

Where in simple terms we can say, REIT is a company that owns and typically operates income-producing real estate or related assets. These may include office buildings, shopping malls, apartments, hotels, resorts, self-storage facilities, warehouses, and mortgages or loans.

SM REIT stands for Small and Medium Real Estate Investment Trusts and they are a subclass within the REIT framework that provides access to individual investors to rent yielding real estate like office buildings, retail malls, hotels, hospitals etc. that are valued between Rs. 50 and 500 crores. Similar to REITs, SM REIT units will also be traded on the stock exchange and are regulated by the Securities and Exchange Board of India (SEBI).

SEBI introduced the SM REIT regulations with the objective of making smaller real estate assets valued between Rs. 50-500 crores more accessible to the retail and institutional investors. Mainboard REITs are only allowed to list assets over Rs. 500 crores but there exists a significant market of rent yielding assets valued less than 500 crores that can also be monetized through a listed and regulated trust vehicle on the same lines as mainboard REITs. The SM REIT regulations also helped bring the existing fractional ownership platforms within the regulatory ambit.

The minimum investment shall be in units of Rs 10 lakh and additional investments would be in multiples of Rs 10 lakhs.

Via bank transfer only. Please talk to your manager regarding all paperwork.

IFO facility has best in industry liquidity option available. After 90 days of Initial engagement you can withdraw 70% of fund anytime, for that you will be charged 10.50% Yearly service charge rate, while on the other hand you can maintain 100% intrinsic value of your investment. Please talk to your RM and know more about it.