Fractional ownership platform Property Share has become the first fractional ownership platform (FOP) to receive the Small and Medium Real Estate Investment Trust (SM REIT) license from the Securities and Exchange Board of India (SEBI) under the newly notified SM REIT regulations under the name of Property Share Investment Trust (PSIT), the company said in a statement on August 9.
In a statement, the company said it has “become the first fractional ownership platform (FOP) to receive the Small and Medium Real Estate Investment Trust (SM REIT) license from the Securities and Exchange Board of India (SEBI)”.
Property Share will become the investment manager to PSIT.
The firm aims to file for its initial SM REIT scheme for a โน330 crore fully-leased commercial property in Bengaluru, sources said.
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.
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What is fractional ownership?
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.
Founded in 2016 by IIM, Ahmedabad batchmates Kunal Moktan and Hashim Khan, Property Share was one of the first platforms to pioneer fractional ownership of commercial real estate in India. The platform serves approximately 300,000 users in more than 20 countries across 5 continents. In June 2022, it raised โน347 crore in a Series B round from WestBridge Capital.
Also Read: SEBI notifies SM REITs: Move to regulate fractional ownership industry and safeguard investorsโ interests
โThe regulator has been very proactive in bringing this exciting new product into the regulatory mainstream that is set to make real estate more inclusive to a larger audience of retail and institutional investors. Any regulated product comes with significant benefits for investors like high-net-worth requirements for the investment manager, compliance and reporting standards, transparency, investor protection mechanisms, and marketing restrictions. We look forward to continue working closely with SEBI in launching the IPO of the first SM REIT scheme in the weeks to come,โ said Kunal Moktan, co-founder of Property Share.
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