How might real estate investors benefit from SEBI’s approval of small and medium-sized REITs?

Posted on by

SEBI’s decision to encourage investments in Small and Medium REITs (SM REITs). The REITs (Real Estate Investment Trusts) Regulations, 2014, were amended yesterday by the SEBI board. These amendments aim to establish a regulatory framework that will facilitate the establishment of SM REITs, which will have an asset value of at least Rs 50 crore as opposed to the existing REITs’ minimum asset value of Rs 500 crore. The decision received approval at the Securities and Exchange Board of India (SEBI) meeting in Mumbai.

Experts in the industry welcomed Sebi’s decision to regulate fractional ownership of real estate. “We applaud SEBI’s progressive move in regulating the fractional ownership framework with the amendments to the REIT Regulations,” stated Aryaman Vir, CEO of WiseX, “as the pioneers of the Fractional Ownership model and neo-realty investments in India.” 

The Small and Medium Real Estate Investment Trusts (REITs) aim to significantly expand the market so that more retail investors can own a fractional interest in REIT units, according to Madhabi Puri Buch, the Chairperson of the Sevi. She added that the regulator is willing to consider developing more goods of this kind.

The CEO of WiseX praised SEBI for recognizing the expanding trend of fractional ownership platforms and expanding regulatory oversight.

“We think it will guarantee investor protection, standard disclosure procedures, and a strong redressal mechanism in addition to stimulating investor interest in the real estate sector,” he continued.

Vir went on, “In addition, investors looking for more accessible entry points into real estate ownership will have exciting opportunities thanks to the lowered minimum asset value of Rs 50 crore for small and medium REITs. SM REITs’ ability to establish distinct schemes enhances the flexibility and inventiveness of real estate portfolio structuring. We anticipate that these regulatory changes will positively impact the ecosystem of fractional ownership, encouraging greater diversity and inclusivity in real estate investments.”