Small and Medium Real-Estate Investment Trusts

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About Small and Medium Real-Estate Investment Trusts

These are specialised real estate investment trusts that differ from conventional REITs in their scale and focus.
Aim: To regulate the fractional ownership industry and safeguard investor interests, incorporating both commercial and residential properties within the new framework.
The minimum subscription size of this scheme unit will be 10 lakh and treated as one unit.
The SM REIT scheme requires a minimum of 200 unit holders, excluding the investment manager, its related parties and associates.
An investment manager responsible for setting up an SM REIT is required to have a net worth of at least ₹20 crore, and a separate trustee will be appointed for oversight.
The micro REITs will be able to list with an asset value of at least Rs 50 crore and a maximum of Rs 500 crore.
These funds are to be used for acquiring and managing real estate assets, generating income for the investors.
The ownership of these assets will be structured through one or more schemes, each operating under special purpose vehicles (SPVs).
While traditional REITs primarily invest in large-scale commercial properties, such as office buildings and shopping malls, SM REITs concentrate on smaller and medium-sized properties with lower value.

Q1) What are Real Estate Investment Trusts (REITs)?

A REIT is a company that owns and typically operates income-producing real estate or related assets. They pool money from the investors and invest it in commercial real estate projects.These may include office buildings, shopping malls, apartments, hotels, resorts, self-storage facilities, warehouses, and mortgages or loans.

Source: SM REITs can help investors bet on high-value assets