This explainer series on SM REITs is brought to you by Property Share, where we break down everything you need to know about SM REITs—making real estate investment simple and accessible. Explore the various sections to learn about the fundamentals of SM REITs, their unique benefits and potential risks, how they are different from regular REITs, how to invest and how to evaluate them, along with their taxation norms.
This explainer series is also available in the form of a video.
SEBI has introduced SM REITs, or Small and Medium Real Estate Investment Trusts to provide retail investors an opportunity to invest in real estate with smaller capital requirements, making property investment more accessible.
SM REITs are launched through an Initial Public Offering or IPO. Similar to stock IPOs, investors can apply for units during this stage. To invest in SM REITs, one needs a Demat account and a Trading account with a SEBI-registered stockbroker. The process includes:
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Applying for the scheme through ASBA or your bank
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Allocation of units to investors
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Listing of the scheme on the stock exchange for trading
The ASBA, or Application Supported by Blocked Amount process, allows investors to apply for SM REIT units without transferring funds immediately. The easiest way is to apply online through the Internet Banking facilities of all the SCSBs (Self Certified Syndicate Banks). A few examples for some of the common banks are shown here.
There are multiple other ways to apply as well for an SM REIT scheme IPO:
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Apply online through your ASBA enabled brokerage accounts (for example, ICICI Direct)
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Submit physical application form at your ASBA bank or branch holding your bank account
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Download the e-form from the scheme page in BSE's website and submit at your ASBA bank or branch
After investing, it’s important to track your SM REIT’s performance regularly. Investors should keep an eye on key factors such as rental distributions, changes in property valuation and market trends in the real estate sector. Monitoring these factors will help one make informed decisions and maximize the returns.
Investing in SM REITs is a simple and efficient way to gain exposure to the real estate market without owning physical property. Whether one invests through an IPO or buys units on the exchange, SM REITs offer an opportunity for portfolio diversification and passive income.