SEBI Small and Medium REITs: India's Listed Answer to Fractional Offices
India had a fractional office market before it had a rule for one. From about 2015 platforms such as Property Share, hBits and Strata pooled investors into special purpose vehicles that bought leased Grade A offices, with no regulator over the offering. In March 2024 the Securities and Exchange Board of India closed that gap by creating the Small and Medium REIT, a listed trust whose schemes each hold a small portfolio of completed, income-producing property and sell units of at least ₹10 lakh on a stock exchange. This page explains what a unit is, what SEBI requires of the trust and its manager, who may buy, how the exchange exit works, what the offer documents disclose, and how the three Indian platforms on Threeworld answered the new rule: one listed, one registered, one surrendered.
Who uses this structure on Threeworld
- Property Share
Units of a scheme of Property Share Investment Trust, a SEBI-registered Small and Medium REIT, where each scheme owns one fully leased office asset and is listed on the BSE
Securities and Exchange Board of India (SEBI). Property Share Investment Trust is registered as a Small and Medium REIT and PropShare Investment Manager Private Limited is its investment manager. Property Share SM REIT page, checked October 24, 2026.
- hBits
Units of a scheme of hBits Investment Trust, a SEBI-registered Small and Medium REIT, holding completed, income-producing commercial property
Securities and Exchange Board of India (SEBI). hBits Investment Trust is registered as a Small and Medium REIT and hBits Investment Management Private Limited is its investment manager. hBits about page, checked October 24, 2026.
Table of contents
What You Actually Own
Property Share's registry row describes a unit of a scheme of Property Share Investment Trust, a SEBI-registered Small and Medium REIT, where each scheme owns one fully leased office building and is listed on the BSE. That is the shape the regulation prescribes. The trust is a single legal entity registered with SEBI. Under it sit schemes, each a separate pool with its own assets, its own unitholders and its own offer document, so a bad building in one scheme does not reach the others. The scheme holds the property through a special purpose vehicle it owns outright, and your unit is a share of that scheme. A unit entitles you to the scheme's distributions and to a vote on the matters the regulation reserves for unitholders, such as a sale of the asset or a change of manager. You cannot occupy the building or deal with its title, and the manager runs leasing, maintenance and the eventual sale. In substance it is the same position as a unitholder in an Australian managed investment scheme or a shareholder in a Regulation A+ property LLC, with the difference that the units are listed securities from day one.
What SEBI Requires
SEBI wrote the SM REIT rules into its REIT regulations in March 2024 as a new chapter, with a lower size floor than a full REIT and tighter limits on what a scheme may hold. Each scheme must own completed, revenue-generating property worth between ₹50 crore and ₹500 crore, with at least 95% of its assets in such property and the rest in liquid assets. Land and buildings under construction are not allowed. The scheme must distribute at least 95% of its net distributable cash flow to unitholders at least every quarter, and its assets are valued by a registered valuer at least once a year. The investment manager is the regulated party. It needs SEBI approval, a minimum net worth, and skin in the game: it must hold at least 5% of every scheme's units for the first years after listing, more if the scheme borrows. Property Share's manager puts 5% of its own money into every property, as its registry row says. A SEBI-registered trustee independent of the manager holds the assets and watches over the distributions, and every scheme's offer document is filed with SEBI before the units are sold. Existing fractional platforms were given a window to register as SM REITs or stop offering. Property Share registered first and listed its Platina scheme in December 2024. hBits registered in April 2025 and is still to list a scheme. Strata registered, then surrendered its registration on 14 May 2025 after legal proceedings involving a promoter, and SEBI cautioned investors and barred it from presenting itself as regulated. Its registry row says it keeps selling SPV stakes outside the framework, with no regulator over the offering.
Who Can Buy
Anyone with an Indian demat account and the money for a lot. The regulation sets the minimum subscription and trading lot at ₹10 lakh, about $12,000, which is the threshold that separates SM REITs from the full REITs anyone can buy for a few hundred rupees and from the old SPV platforms whose tickets ran to ₹25 lakh. There is no income or net-worth test, no accredited-investor category, and no cap on how much one person may hold beyond the rule that a scheme needs at least 200 public unitholders. Non-resident Indians and foreign investors can buy within the foreign exchange rules that apply to listed Indian securities. Property Share's registry row lists the trust's eligibility as any investor with a demat account, in lots of ₹10 lakh, and hBits says the same for the schemes it has yet to launch.
Selling on the Exchange
Listing is compulsory, so the exit is the stock exchange. Property Share's registry row says units are listed on the BSE and sold through your demat account like any listed security, any trading day, with no lock-up and no platform fee beyond your broker's charges. There is no redemption window and the scheme does not buy units back. If nobody bids at your price, you hold. That is the honest limit of the structure. A scheme has a few hundred unitholders and one building, so trading is thin and the quoted price can sit far from the valuation for months. hBits, whose row says no scheme is trading yet, promises nothing about volume. Strata's investors, outside the framework, have no exchange at all: its row describes a three-to-six-month lock-in, then a resale that depends on finding another investor and on the other minority holders. Compare both with BrickX's order book and Stake's twice-yearly windows in the guide to how you get your money out.
The Offer Documents
Every scheme comes with a scheme offer document, split since 2025 into a Key Information of the Trust and a Key Information of the Scheme, filed in draft with SEBI and then in final form before the issue opens. They run to several hundred pages and are published on the manager's site. The parts that matter are the fee schedule, the valuation report, the tenant and lease summary, the projected distributions and the expense ratio. The fees are in the scheme document, not on the website, and they differ scheme by scheme. Property Share's registry row records the pattern across its four filings: no management fee in the scheme's first financial year, then 0.25% to 0.50% of the money raised each year, a one-time acquisition fee of 1% to 3% of the property price, a capital arrangement fee of about 3.9% on the newest schemes and up to 3% of the sale price when the building is sold. All of it is charged to the scheme, so it never appears on your statement and only shows up as a lower distribution. After listing, the scheme files quarterly results and an annual valuation with the exchange, which is more than any SPV platform ever published.
What to Check Before You Buy
Confirm the trust's SEBI registration on SEBI's list of registered SM REITs, and that the scheme you are buying is one of its listed schemes, not an older SPV offering from the same brand. Read the fee section of the Key Information of the Scheme: the recurring fee, what it is a percentage of, the acquisition and arrangement fees already taken from the raise, and the divestment fee at sale. Check the valuation report's date, the valuer's name and the capitalisation rate, and compare the issue price to the valuation per unit. Read the lease summary: how many tenants, when the leases expire, and what happens to distributions if the single tenant leaves. Look at the exchange's trading history for the units before you buy, since that is the market you will sell into. If a platform says it is SEBI-regulated, check that the registration is current. Strata's was surrendered in May 2025 and SEBI told investors to be cautious.
Questions people ask
What is a Small and Medium REIT?
- A real estate investment trust registered with SEBI under rules added in March 2024 for smaller pools than a full REIT. Each scheme holds completed, income-producing property worth ₹50 crore to ₹500 crore, lists its units on a stock exchange in lots of ₹10 lakh and pays out at least 95% of its cash flow every quarter. It is the regulated successor to India's fractional office platforms.
Which platforms on Threeworld are SM REITs?
- Property Share, whose Property Share Investment Trust has listed three schemes on the BSE since December 2024 with a fourth filed, and hBits, whose hBits Investment Trust was registered in April 2025 and has not yet listed a scheme. Strata registered and then surrendered its registration in May 2025, so it sells SPV stakes outside the framework.
What is the minimum investment in an SM REIT?
- ₹10 lakh, about $12,000, which is both the minimum subscription in a scheme's public offering and the trading lot on the exchange. There is no wealth or income test, only a demat account.
How do I sell SM REIT units?
- On the stock exchange where the scheme is listed, through your broker, on any trading day. There is no lock-up, no redemption window and no scheme fee on the sale, but also no guaranteed buyer, and a single-building scheme with a few hundred holders trades thinly.
Who regulates an SM REIT?
- SEBI, the Securities and Exchange Board of India. It registers the trust, approves the investment manager, reviews every scheme's offer document before the units are sold and supervises the trustee, the valuations and the quarterly distributions.
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