

New REITs regulations by SEBI is a game changer: 7 ways how it can help fractional real estate investors
REITs, especially the reduction of the minimum ticket size to Rs 10 lakh, by the Indian market regulator SEBI, is touted to be a game changer for the new-age fractional investment platforms in the country.
Here's a primer on how this much-needed transparency could benefit retail investors, as well as high net worth investors (HNIs), looking to add the highest-graded commercial real estate to their portfolios using the Real Estate Investment Trusts (REITs) route.
Where the fractional real estate industry stood before recent SEBI regulation
Buying a fraction of otherwise unaffordable large real estate assets is known as fractional investment. Through fractional investment, you co-own property with other people, which could be a rent-yielding office space or a building. What you earn is a proportion of the rent plus a potential upside appreciation in the price of the asset itself.
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Over the last few years, several new-age fractional investment companies such as hBits, Strata, PropertyShare, and Altgraf have listed a range of commercial properties on their IT-enabled platforms, which HNIs can invest in. Currently, these platforms are unregulated entities that are mainly web-based and operate by aggregating funds from investors to buy stakes in pre-leased commercial real estate, typically with a minimum ticket size of Rs 25 lakh. The lack of a standardised framework, or independent valuation and due diligence of assets owned made them a high-risk investment, and investor appetite was limited.
How the new SEBI
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