Strata to Apply for SM REITs License, Targeting ₹2000 Crore AUM in Fractional Ownership

Strata, India’s commercial real estate (CRE) investment platform, has filed an application for the SM REITs license under the latest regulations issued by Securities and Exchanges Board of India (SEBI). Strata will also initiate the migration of its eligible assets to SM REITs, as it aims to achieve a total AUM of INR 2000 crore by the end of FY25. 

Strata's decision aligns with SEBI's recent regulatory advancements that expand the possibilities for fractional ownership, making it feasible to include larger assets, which were previously limited due to various technical and legal constraints. 

In 2023, SEBI introduced the concept of Small and Medium REITs to facilitate fractional ownership for assets valued over ₹50 crore. This regulatory enhancement aims to streamline the investment process and boost investor confidence by making fractional ownership a mainstream investment option. The detailed framework for SM REITs, released in early 2024, has further defined the operational and structural specifics, thereby providing a clearer path for investment platforms like Strata. 

Strata’s initiative to integrate its eligible assets into SM REITs is expected to strengthen its portfolio and enhance its market position. The company has already made substantial progress in the fractional ownership sector, with over ₹1,800 crore in transactions and managing over 4 million sq. ft. of commercial space across key Indian cities like Mumbai, Bengaluru, and Hyderabad.

With the backing of institutional investors such as Kotak Investment Advisors and Gruhas Proptech, Strata is well-positioned to capitalize on the opportunities presented by the SM REITs framework. This strategic move not only aims to elevate Strata’s operational capabilities but also reinforces its commitment to fostering robust investor and developer relationships, which are crucial for the sustained growth of its asset portfolio. 

This development reflects a significant trend in India’s real estate investment sector, where regulatory enhancements and innovative investment platforms are shaping the future of commercial real estate investments. The introduction of SM REITs by SEBI is a testament to the evolving landscape of real estate investments in India, offering a promising outlook for both investors and developers in the commercial real estate domain.