Property Share’s Bold Plan to Transform India’s Commercial Real Estate Investment Landscape in 2025

In the rapidly evolving world of real estate, fractional ownership is setting the stage for a new investment era. Property Share, an innovative fractional real estate ownership firm, is gearing up for an ambitious journey to reshape India's commercial real estate market. Its CEO, Kunal Moktan, has revealed that the company plans to launch a fresh Small and Medium-scale Real Estate Investment Trust (SM REIT) scheme every month in 2025. This bold move aims to bring more investment opportunities to the forefront, largely focused on the income-generating commercial property segment.

The Rise of SM REITs

SM REITs are an innovative financial product, offering investors an entry point into commercial properties without requiring them to purchase entire buildings. These schemes are floated individually, much like asset management companies (AMCs) release separate mutual funds. Essentially, each SM REIT is a distinct investment opportunity that primarily invests in completed, income-yielding commercial properties. The move is designed to democratize real estate investments, especially in income-generating commercial spaces, for those who would otherwise be excluded from such lucrative opportunities.

Property Share’s Strategic Vision for 2025

Property Share’s co-founder and CEO, Kunal Moktan, shared his vision during a recent interaction with Moneycontrol, emphasizing that their goal for 2025 is to launch 12 SM REIT schemes, one for each month of the year. This expansion follows the firm’s groundbreaking achievement of receiving approval from the Securities and Exchange Board of India (SEBI), granting them the license to operate as an SM REIT provider. In fact, Property Share holds the distinction of being the first company in India to receive such a license, setting the stage for other industry players, like the infrastructure and real estate firm REPL, to follow suit.

“Our first scheme is projected to raise Rs 353 crore,” said Moktan. “We are eagerly awaiting approval from SEBI. This will be an investment opportunity in a commercial project located along Bengaluru's vibrant Outer Ring Road. Our second scheme is already in the works, and we are on track to launch one scheme every month for the next year.”

SM REITs: A Unique Investment Opportunity

Unlike traditional Real Estate Investment Trusts (REITs) that can invest in both completed properties and under-construction projects, SM REITs are restricted to investing only in completed, rent-generating assets. This limitation ensures that investors in SM REITs can expect steady returns from finished properties, which are already generating rental income.

The appeal of SM REITs lies in their potential for higher yields. According to Moktan, while listed REITs typically offer rental yields in the 5–5.5% range, SM REITs are expected to provide a yield between 8.5–9%. These higher returns stem from the strict focus on finished, income-generating properties. Moreover, investors can look forward to diverse opportunities in sectors like offices, retail, and hospitality, further adding to the allure of these schemes.

Overcoming Challenges and Ensuring Stability

While the rise of SM REITs has sparked excitement in the market, it has also raised some concerns. Industry critics worry that these schemes, with asset sizes ranging from Rs 50 crore to Rs 500 crore, could be used for speculative investments, reminiscent of certain SME public offerings. However, Moktan is confident that the safeguards in place will prevent this from happening. He explains, “Our first scheme is substantial, with an investment size of Rs 353 crore, and the minimum investment in an SM REIT is set at Rs 10 lakh. We also plan to list on the mainboard rather than the SME board, where speculative activities have been prevalent.”

A Bright Future for SM REITs

With a strategic plan to introduce one new scheme every month, Property Share is poised to lead the charge in transforming the landscape of commercial real estate investment. The company’s deep commitment to transparency, regulation, and investor protection ensures that its SM REITs will offer a stable and sustainable investment vehicle. As the Indian market continues to evolve, these innovative schemes are set to redefine the way investors engage with real estate.