Property Share, a fractional ownership platform (FOP), has been granted the nation’s first Small and Medium Real Estate Investment Trust (SM REIT) license by the Securities and Exchange Board of India (SEBI).
The trust will be known as Property Share Investment Trust (PSIT), with Kunal Moktan serving as its CEO and co-founder. In 4-6 weeks, he added, Property Share intends to initiate the first SM REIT scheme’s first public offering.
The SM REIT laws were issued by SEBI in March 2024, with the aim of incorporating FOPs as a subclass under the REIT regulations, namely for assets valued between Rs 50 crore and Rs 500 crore. Like REITs, SM REITs are completely governed by SEBI and have stock exchange listings for each scheme’s units.
“Property Share Investment Trust will be the country’s first SM REIT as we have received the SM REIT licence from the SEBI. We had applied for the licence in early April 2024. In the next 4-6 weeks we will launch the IPO or scheme of the first SM REIT to raise Rs 330 crore. Modalities for the same are being worked out,” Moktan said.
In the upcoming year, he added, Property Share intends to list four to six schemes with a combined value of between Rs. 1,500 crore and Rs. 2,000 crore.
First, SM REIT, according to him, will give investors access to a new asset class and increase the number of retail and institutional investors who can participate in real estate.
The merchant banker will be ICICI Securities, while the legal counsel will be Cyril Amarchand Mangaldas, he said.
The regulator has essentially created a whole new asset class for retail and institutional investors with the introduction of SM REITs, according to Hashim Khan, co-founder of Property Share. This move advances the trend towards securitization of real estate assets, which began with the REIT regulations in 2014.
“This is also a very proud and significant milestone for Property Share that set the foundations for this regulation more than 8 years ago through one of the first technology driven real estate investment platform in the country,” he stated.
Established in 2016, Property Share provides services to about 300,000 users in over 20 countries in five continents. It raised Rs 347 crores in a Series B financing led by WestBridge Capital in June 2022.