Fractional ownership platform Property Share Investment Trust, led by former Blackstone executive Kunal Moktan and Hashim Khan, has filed the draft papers with the regulator to list its second small and medium real estate investment trust (SM REIT) scheme.
PropShare Titania, the second SM REIT scheme to be listed, will aim to mop up about Rs 472 crore from investors through an initial public offering. For its first scheme, PropShare Platina, it set out to raise about Rs 350 crore.
Property Share received its SM REIT licence from the Securities and Exchange Board of India in August last year.
The latest public offering will put on block 437,973 square feet of the office space at G Corp Tech Park, a Grade A+ office asset in Mumbai.
“In a volatile equity market environment, rent-yielding commercial assets like SM REITs are emerging as an alternative investment opportunity for investors,” Moktan said.
The office asset is fully occupied by tenants including Aditya Birla Capital and Concentrix. Property Share said the building’s tenants have occupied the space for over nine years with an annual 5% rental escalation clause. The scheme’s projected distribution yield is about 9% for the current and next fiscal years, and 9.1% for FY28.
Property Share has waived the annual management expenses fees for this financial year. It will charge a 0.5% fee starting FY27.
Property Share will subscribe to about 5% of the issue as the investment manager’s contribution. Up to 75% of the issue size is reserved for institutional investors and the remaining for retail and non-institutional investors.
The proceeds from the public listing shall be used for acquisition of the asset.
The fractional ownership player filed the draft papers for its maiden SM REIT IPO in August last year, where it put on block 246,000 square feet of office space in Prestige Tech Platina, an office asset located in Bengaluru. At the time of listing, it was proposed to be fully leased to a US-based tech company through a fresh nine-year lease with a 4.6 year weighted average lock-in and 15% escalation in rents every three years. It launched its IPO and listed the maiden SM REIT scheme on the BSE in December last year.
Among other players looking to launch their SM REIT IPOs, fractional ownership platform hBits received regulatory approvallast month. The platform plans to launch its public issue in June while migrating its commercial assets to the REIT. Other players including Strata, EFC Ltd, and Rudrabhishek Enterprises Ltd have received their SM REIT licences but are yet to launch their public offerings.
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.
