Infrastructure consulting firm Rudrabhishek Enterprises Ltd (REPL) has secured approval from the Securities and Exchange Board of India (SEBI) to register its small and medium real estate investment trust (SM REIT), named ImpactR SM REIT. This makes REPL the second company to receive such approval, following the recent establishment of rules for this nascent investment segment earlier in 2024.
SEBI’s decision follows the approval of the first SM REIT application, submitted by Property Share, a fractional ownership platform, which operates under the name Property Share Investment Trust. However, Property Share is yet to be listed on the stock exchanges, leaving ImpactR SM REIT as one of the pioneers in this emerging sector.
Opening Up Real Estate to a Broader Investor Base
The launch of ImpactR SM REIT is set to bring structured and transparent investment opportunities to a broader range of investors. REPL, led by Pradeep Misra, its chairman and managing director, sees this as a significant step towards democratizing real estate investment. “With our extensive experience in real estate and urban infrastructure, we are confident that ImpactR SM REIT will have a transformative impact on our stakeholders and the industry,” Misra stated.
REPL has built its reputation on providing consultancy services for infrastructure and real estate projects, making this foray into the REIT space a natural extension of its expertise. The company is listed on the small and medium enterprises (SME) platform of the National Stock Exchange (NSE), further positioning itself to take advantage of SEBI’s new regulations.
SEBI’s Rules for SM REITs
In March 2024, SEBI finalised rules to bring fractional ownership platforms under the purview of REITs, introducing the concept of SM REITs for assets valued between Rs 50 crore and Rs 500 crore. SM REITs allow investors to gain exposure to real estate assets through special purpose vehicles (SPVs), enabling smaller-scale investors to participate in real estate ventures that were traditionally accessible only to large investors.
According to a report by real estate consultants CBRE, the potential market size for SM REITs could exceed $60 billion by 2026, with around 350 million square feet of office space projected to be included in this segment. The report also highlighted Mumbai as the city with the most SM REIT-ready stock, boasting 75 million square feet, followed by the National Capital Region (NCR) with 70 million square feet as of June 2024.
A New Era for Real Estate Investment
The introduction of SM REITs, particularly with the establishment of ImpactR SM REIT, is set to transform real estate investing in India. It will offer a more accessible, transparent, and structured investment route for both institutional and retail investors, ensuring a more democratized entry into the lucrative real estate market.
As more companies like REPL enter this space, the SM REIT market is poised to experience rapid growth, offering new opportunities for both developers and investors alike.
