Fractional ownership is expected to list over Rs 4,000 crore worth of existing AUM over the next 2-3 years
Securities and Exchange Board of India (SEBI) guidelines for Small and Medium REITs (SM-REITs) is expected to list over Rs 4,000 crore worth of existing fractional assets under management owned by multiple platforms over the next 2-3 years.
SEBI has recently issued guidelines for Small and Medium Real Estate Investment Trusts (REITs), which are expected to facilitate the listing of a significant number of previously unregistered fraction ownership platforma (FOPs) like Strata, hBits PropertyShare, Assetmonk, Alyf, YOURS and WiseX dealing in real estate assets. The move is aimed at promoting transparency and accountability in the real estate sector, and is likely to provide a boost to the Indian REIT market.
“SM REITs will not only foster retail investors’ interest in the real estate sector but will ensure investment portfolio diversification in a regulated environment.
Aspects like reduction in minimum investment amount, mandatory manager holding period, and 95% presence of income generating assets will make SM REITs more endearing to the informed investor. Interestingly, the number of unitholders for the three office REITs in India have shown an annual growth of 60-80% since listing.
On similar lines, SM REITs have a potential to witness an increase in ownership base by up to 20 times in the next 4-5 years. Altogether, the Indian realty sector will witness fractional ownership being established as a promising alternative investment avenue in the coming years.” said Badal Yagnik, Chief Executive Officer, Colliers India.
