SEBI's 'New Asset Class' With Minimum Investment Limit Of Rs 10 Lakh. How To Invest? Watch Here

SM REITs, similar to traditional Real Estate Investment Trusts (REITs), will allow individuals to invest in pre-leased offices, retail malls, hotels, and other commercial properties

The Securities and Exchange Board of India (SEBI) has announced a proposal to introduce a new asset class aimed at filling the gap between mutual funds (MFs) and portfolio management services (PMS). This initiative, focusing on Small and Medium Real Estate Investment Trusts (SM REITs), will provide investors with an opportunity to invest in real estate assets with a minimum threshold of Rs 10 lakh.

SM REITs, similar to traditional Real Estate Investment Trusts (REITs), will allow individuals to invest in pre-leased offices, retail malls, hotels, and other commercial properties. These units will be traded on stock exchanges and will be fully regulated by SEBI, ensuring transparency and investor protection.

According to CS Ujjawal Pahwa, who recently explained the concept in a video, SM REITs offer several advantages.

 

Investors can enjoy a steady income from rent while also benefiting from potential capital appreciation. One of the standout features is the elimination of the complexities involved in active property management. The entire process, including tenant management, rent collection, and property maintenance, is handled by professionals.

Investors only need a Demat account to begin investing in SM REITs. Before making any investments, individuals have access to key information, such as tenant details, rental income, and rent lock-in periods, ensuring full transparency. SEBI's move to introduce SM REITs could open up a new avenue for investors looking for diversified, real estate-focused portfolios without the traditional hassles of property ownership.

In the consultation paper, SEBI had said, "The new asset class seeks to provide investors with a regulated investment product featuring higher risk-taking capabilities and a higher ticket size, aimed at curbing the proliferation of unregistered and unauthorised investment products."