SEBI notified the regulations for small and medium real estate investment trusts

Current Context: The Securities and Exchange Board of India (SEBI) has indeed issued regulations to amend the REIT Regulations 2014.

• These amendments establish guidelines for the creation of Small and Medium Real Estate Investment Trusts (SM REITs).
• The new regulations, known as the SEBI (REIT) (Amendment) Regulations 2024, will come into force on the date of their publication in the official gazette.
• Under these regulations, an SM REIT will be permitted to gather funds starting from ₹50 crore by issuing units to a minimum of 200 investors.
• These funds will be utilized for acquiring and managing real estate assets or properties.
• The amendments are expected to open the doors to fractional ownership of rent-yielding real estate assets, including uber-luxury second homes across the country.
• This is a significant move to regulate the fractional ownership industry.
• It’s important to note that at least 95% of the assets for SM REIT schemes must be fully developed and generating revenue, compared to the 80% requirement for larger REITs.
• These regulations are aimed at expanding investment opportunities and regulating the real estate sector more effectively.

Question:

Q.1 What is the minimum number of investors to whom an small and medium real estate investment trusts (SM REIT) can issue units?
a. 100
b. 400
c. 300
d. 200