First small & medium REIT may be launched, listed on bourse in 6 months: NAREDCO

India's first Small and Medium Real Estate Investment Trust (SM-REIT) is expected to be listed on stock exchanges within the next six months, enabling small investors to have fractional ownership of rent-yielding properties by investing as low as Rs 10 lakh, according to NAREDCO.

Addressing a webinar on Wednesday, realtors' body NAREDCO President G Hari Babu said, "We are expecting the launch of first SM-REIT by September-October". Last month, the Securities and Exchange Board of India (Sebi) had notified the framework for SM REITs.

Investors can now have fractional ownership of rent-yielding real estate assets by making a minimum investment of Rs 10 lakh, with markets watchdog Sebi notifying the amended regulations for real estate investment trusts.

Hari Babu highlighted the benefits of SM-REITs and said small investors can now invest in rent-yielding real estate assets and earn both rental income as well as capital appreciation. NAREDCO Chairman Niranjan Hiranandani hailed the new framework for SM-REITs, which he said has come after the success of REITs.

There are three REITs backed by office assets -- Embassy Office Parks REIT, Mindspace Business Parks REIT and Brookfield India Real Estate Trust --- and one retail asset backed REIT named Nexus Select Trust.

NAREDCO Vice Chairman Rajan Bandelkar said the real estate sector has changed a lot and become more organised. He said SM-REITs will benefit retail investors a lot. Amit Kumar Kedia, Director of Kedia Corporate Advisors Pvt Ltd, gave a detailed presentation on SM-REITs. He expected the first SM-REIT to get listed within 3-4 months.

In November last year, the Sebi board cleared the amendments to REITs Regulations, 2014, in order to create a regulatory framework for the facilitation of SM REITs, with an asset value of at least Rs 50 crore vis-a-vis minimum asset value of Rs 500 crore for existing REITs.

As per the notification, the minimum price of each unit of the scheme of SM-REIT shall be Rs 10 lakh or such other amount as may be specified by Sebi from time to time. "The size of the asset proposed to be acquired in a scheme of the SM-REIT is at least Rs 50 crore and less than Rs 500 crore ..," it added.

The framework for SM REITs provides for the structure, migration of existing structures meeting certain specified criteria, obligations of the investment manager, including net worth, experience, and minimum unit holding requirement, investment conditions, minimum subscription, distribution norms and valuation of assets.