By laksh5382 
Small and medium real estate investment trusts (SM REITs) will have their own self-regulatory organization as an apex body, a move that has been endorsed by the Securities and Exchange Board of India (SEBI), sources said.
He said SM REIT, the former fractional ownership platform, which has just started registration with SEBI, will not be brought under the ambit of the Indian REIT Association.
According to sources, the regulator feels that SM REITs need to be regulated differently from traditional REITs and should have their own apex organization to deal with their specific characteristics. An apex organization is likely to be formed soon as there are already three registered SM REITs – Property Share Investment Trust, Impact R SM REIT, and Amberstone SM REIT.
IRA, a non-profit organization set up under the guidance of SEBI, has four large listed REITs as members. The four REITs are Embassy Office Park REIT, Mindspace Business Park REIT, Brookfield Indian Real Estate Trust and Nexus Select Trust.
While fractional ownership platforms were brought under the ambit of REIT rules through an amendment and notification of the new regulatory framework in March 2024, they function slightly differently from traditional REITs.
They also invest in and develop commercial real estate assets, in which investors can participate through subscription of units, but they act like mutual funds when raising money. Each property or asset added is linked to a scheme for which funds are raised through the issue of units. They have multiple plan structures and different assets can be held under different plans.
PropShare SM REIT IPO
Meanwhile, SM REIT is closely tracking the fortunes of Property Shares and the country’s first SM REIT IPO scheme, PropShare Platina, which is raising ₹353 crore with a price band of ₹10-10.5 lakh per unit. A lot will depend on what response the REIT gets from investors.
The issue is open from December 2-4 and has been subscribed 0.08 times and institutional investors are yet to bid for the offered units, exchange data showed.
A top executive of SM REIT, which is awaiting Sebi approval for its registration, said if the response had been poor, they would probably have considered raising a smaller amount instead of the ₹500 crore plan.