In a significant move poised to redefine retail investment access to India’s commercial real estate sector, hBits, a leading fractional ownership platform, has received the green light from the Securities and Exchange Board of India (SEBI) to launch its Small and Medium Real Estate Investment Trust (SM REIT). hBits REIT is set to raise INR 400–500 crore through its maiden public offer, and it is tentatively scheduled for June 2025.
This approval makes hBits the second entity in India to receive an SM REIT license, following the landmark licensing of Property Share earlier this year. The development underscores the rapid evolution of India’s proptech sector and the growing legitimacy of fractional ownership as a mainstream investment class.
hBits REIT – A New Chapter For Retail Real Estate Investment
With SEBI’s March 2024 introduction of a regulatory framework for SM REITs—covering assets ranging from INR 50 crore to INR 500 crore—fractional ownership platforms (FOPs) have now been brought under formal oversight. The regulations mandate the listing of each SM REIT scheme on stock exchanges, ensuring transparency, governance, and investor protection comparable to large-scale REITs.
Speaking on the development, Shiv Parekh, Founder and CEO of hBits, remarked,
“India’s commercial real estate sector has shown consistent growth, especially in office spaces. SEBI’s framework enables a transparent, structured, and investor-friendly model to unlock value from this sector for retail investors. Through SM REITs, we are building bridges between premium-grade real estate and everyday investors.”
hBits intends to migrate its existing portfolio of high-end commercial properties into the SM REIT structure over the coming weeks. The move is expected to streamline operations, consolidate asset management, and increase liquidity for existing stakeholders.
Growth Outlook – Scaling to INR 2,000 Cr AUM by FY26
hBits is managing 16 commercial assets and boasting a user base of over 1,00,000 registered investors, hBits has already gained momentum in the fractional ownership space. The company raised INR 40 crore in Series A funding from Capricon Realty, part of the Thackersey Group, a signal of strong institutional backing.
Looking ahead, the platform aims to expand its Assets Under Management (AUM) to INR 2,000 crore by March 2026, by acquiring premium office spaces in top 10 Indian cities—particularly targeting high-yield locations across Mumbai, Bengaluru, Pune, Hyderabad, and NCR.
Yield, Liquidity & Transparency
The upcoming SM REIT IPO will offer investors fractional ownership in a diversified portfolio of commercial assets, allowing access to:
- Stable rental income
- Capital appreciation potential
- Liquidity through stock exchange listing
- Robust governance and regulatory oversight
These benefits have traditionally been available only to institutional or ultra-high-net-worth individuals. The SM REIT model is designed to democratize access for retail investors seeking real estate exposure in smaller, more manageable ticket sizes.
A Sector on the Cusp of Transformation
The Indian commercial real estate market is witnessing a tectonic shift. With SEBI’s regulatory backing, tech-enabled FOPs, and investor appetite for yield-driven assets, the SM REIT framework has emerged as a pivotal innovation. It offers a middle ground between traditional REITs and unregulated private placements, addressing scale limitations while enabling retail participation.
According to industry experts, SM REITs will likely unlock billions in underutilized mid-sized assets, making real estate investment more inclusive, transparent, and liquid.
Conclusion
As the second mover in this newly-regulated space, hBits stands at the forefront of a fast-expanding frontier. Its upcoming IPO, backed by regulatory credibility and growing investor demand, could set new benchmarks for fractional investing in India.
As of April 2025, India has four listed REITs: Embassy, Mindspace, Brookfield, and Nexus Select, covering over 126 million sq. ft. with INR 95,000 crore market cap. SEBI has also registered two unlisted REITs—360 ONE and Office Realty Trust. hBits REIT is set to join with a INR 500 crore IPO.