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hBits secures SEBI approval to launch small & medium REIT

#Taxation & Finance News#India
Last Updated : 11th Apr, 2025
Synopsis

hBits, a fractional ownership platform specializing in commercial real estate, has received approval from the Securities and Exchange Board of India (SEBI) to launch its Small & Medium Real Estate Investment Trust (SM REIT). The company plans to initiate its maiden SM REIT initial public offering (IPO) by June 2025 and aims to migrate its existing portfolio into this structure. hBits targets assets under management (AUM) of INR 2,000 crore by March 2026, providing retail investors access to premium-grade commercial properties with the potential for consistent income and long-term wealth creation.

hBits, a Mumbai-based platform facilitating fractional investment in commercial real estate, has obtained a license from SEBI to introduce its Small & Medium Real Estate Investment Trust (SM REIT). This approval positions hBits among the pioneers in offering SM REITs in India, a move that aligns with the company's mission to democratize access to high-quality commercial real estate investments. 


The company intends to launch its inaugural SM REIT IPO by June 2025. In the interim, hBits plans to transition its existing portfolio of 16 prime commercial assets into the SM REIT framework. This strategic move is designed to enhance transparency and provide a structured investment avenue for retail investors. 

Founder and CEO of hBits, Shiv Parekh, highlighted the robust growth of India's commercial real estate sector, particularly in office spaces. He emphasized that SEBI's regulations for SM REITs have paved the way for creating an investor-friendly platform for fractional ownership in commercial properties. hBits is actively seeking to acquire new commercial properties in prime locations across India's top 10 cities to achieve an AUM of INR 2,000 crore by March 2026. 

The platform currently boasts over 100,000 registered users and offers investment opportunities in grade A commercial properties starting at INR 10 lakh. These investments promise average rental yields of up to 10% and internal rates of return (IRRs) reaching up to 18%. 

In a recent development, hBits secured INR 40 crore in Series A funding from Capricon Realty, part of the Thackersey Group. This infusion of capital is expected to bolster the company's expansion plans and technological enhancements. 

SM REITs are a newly introduced investment vehicle in India, regulated by SEBI. Unlike traditional REITs that focus on large-scale commercial properties, SM REITs enable fractional ownership of smaller, income-generating assets. This structure aims to make real estate investment more accessible to retail investors, offering benefits such as regular rental income, potential capital appreciation, and enhanced liquidity through secondary market mechanisms.

The SEBI approval marks a significant milestone for hBits, positioning it to play a pivotal role in the evolving landscape of real estate investments in India. By launching its SM REIT, hBits aims to provide retail investors with opportunities to invest in premium commercial properties, thereby fostering broader participation in the real estate market. The company's strategic initiatives and recent funding underscore its commitment to democratizing real estate investment and achieving substantial growth in the coming years.

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