NEW DELHI: The market for India’s small and medium real estate investment trusts (SM REITs) has the potential to surpass USD 75 billion, supported by over 500 million sq ft of qualifying office, logistics, and retail assets, as highlighted in a report by CBRE South Asia.
SM REITs, which were introduced under SEBI’s regulatory framework in 2024, facilitate fractional ownership of income-generating properties typically valued between ₹50 crore and ₹500 crore, allowing smaller investors to engage in commercial real estate.
CBRE indicates that this segment could enhance the institutional framework for mid-sized assets and promote increased transparency, improved property management standards, and adherence to ESG principles. Premium grade A+ office assets are anticipated to remain the main focus for investors.
Anshuman Magazine, chairman and CEO for India, Southeast Asia, the Middle East & Africa at CBRE, noted that SM REITs provide a structured and scalable model capable of significantly growing India’s real estate investment landscape. He added that the regulated fractional ownership model could foster a more organized commercial real estate ecosystem.
Rami Kaushal, managing director of Consulting & Valuation Services at CBRE India, remarked that SM REITs could create a bridge between direct ownership and larger REITs, offering investors reliable rental yields and the potential for capital gains. However, he cautioned that the long-term success of this segment will rely on the stakeholders’ ability to navigate the evolving regulations effectively.
According to the report, SM REITs could also benefit developers by enhancing capital recycling and providing access to a diversified array of investors.
CBRE asserts that the maturity of this segment will rely on rigorous governance, transparency in disclosure standards, and consistent performance, with investors likely to emphasize due diligence and asset quality.
