New Delhi, April 9 -- Fractional ownership platform hBits Proptech Pvt Ltd has received regulatory approval to launch its small and medium real estate investment trust (SM REIT) for a public listing, the company said Wednesday.
The platform plans to launch its public issue in June while migrating its commercial assets to the REIT.
VCCircle first reported the development in January, when the platform's founder and CEO Shiv Parekh mentioned that hBits expected to receive approval from the Securities and Exchange Board of India (SEBI) by the end of January.
"Our goal is to create access to high-yielding, premium-grade assets across India's top commercial hubs and provide retail investors with consistent income and long-term wealth creation opportunities," Parekh had said.
In addition to launching its REIT platform, hBits plans to expand its commercial asset portfolio, aiming to grow its assets under management to about Rs 2,000 crore by March next year. In the interaction, Parekh had said that the company's current valuation stands at about Rs 500 crore, and the launch of the SM REIT platform could help triple this number to Rs 1,500 crore.
Currently, hBits has enabled investors to participate in the fractional ownership of 16 properties, primarily grade-A commercial assets generating rental income. The platform claims to offer returns of up to 18% to investors, with a minimum ticket size of Rs 10 lakh.
Some of its notable listings include Bengaluru's Vaswani Centropolis, Times Square and Silver Metropolis in Mumbai, among others.
The hBits SM REIT will be the fifth such REIT to be listed with the capital markets regulator, following Strata, Property Share, EFC Ltd, and Rudrabhishek Enterprises Ltd. Property Share was the first registered SM REIT to launch an initial public offering (IPO). It filed its draft papers in September 2024 and launched the IPO in December, aiming to raise about Rs 350 crore.
The regulator introduced the framework for SM REITs last March, reducing the minimum investment amount to Rs 10 lakh from Rs 25 lakh, which was the norm for fractional ownership earlier. This move allows investors to participate in rent-generating commercial and residential real estate assets.
The listing process for SM REITs is similar to that of larger REITs, with a few differences. Notably, unlike large REITs, SM REITs' assets must be about 95% completed before they can be listed.
According to property consulting firm JLL, the SM REIT market opportunity in India is valued at $48 billion, covering an area of 328 million square feet.
Published by HT Digital Content Services with permission from VC Circle.