Mumbai-headquartered fractional ownership platform hBits has applied for Small and Medium REITs (SM REITs) license with the Securities and Exchange Board of India, the company said in a statement on August 27.
hBits expects to receive the license in the next couple of months and plans to launch its inaugural SM REIT offering in the third quarter of the ongoing financial year, the statement said.
Fractional ownership permits individual investors to co-own commercial or residential assets as an alternative investment. Properties can be acquired through special purpose vehicles or through private limited companies.
Also Read: Fractional ownership platform Property Share receives first SEBI license for SM REIT
In March 2024, SEBI notified the SM REIT regulations to bring FOPs within the regulatory framework as a subclass within the REIT regulations for assets valued between โน50 and 500 crores. Similar to REITs, SM REITs are fully regulated by SEBI with units of each of the schemes listed on the stock exchanges.
โWe are thrilled to announce our application for the SM REITs license, a significant step forward for hBits and our investors,” said Shiv Parekh, founder and CEO of hBits.
“We believe in the tremendous potential that commercial real estate has to offer to Indians and through SM REITs we aim to provide our investors with diversified, lucrative and regulated investment opportunities,” Parekh added.
Also Read: Small and medium REITs: Fractional ownership platforms start the process of registering under Sebi’s new SM REIT rules
The introduction of SM REITs regulations by SEBI is expected to create a more structured and secure environment for fractional ownership investments.
Upon the launch of its first SM REITs, the platform will also subsequently migrate its existing properties into SM REITs over the next few quarters, hBits said.
Business plans
Earlier this month, hBits launched a โน63-crore commercial space in Pune. The asset spans across a chargeable area of 40,000 square feet and has been leased for a period of five years to a US listed multinational giant.
Also Read: Mumbai, Delhi NCR, and Bengaluru account for almost 70% of SM REIT-worthy assets across top seven cities
Overall, the company aims to increase its total assets under management (AUM) to โน10,000 crore over the next five years. Presently, hBits manages a portfolio of 14 properties across key cities, with an AUM of over โน365 crore.
Founded in 2018, hBits enables investors to invest in high-yield, Grade-A commercial spaces at a ticket size as low as โน30 lakh. The brand achieved a successful exit for its inaugural asset, 32 Der Deutsche Parkz, yielding a high IRR of 17.54%.
