Studies have shown that soon the real estate of India is going to transform with the help of Small and Medium Real Estate Investment Trusts also known as SM-REITs and fractional ownership. KPMG in India and CREDAI have collaborated on a ground-breaking report entitled “The New Frontier in Real Estate Investment: For instance, the analysis of the journal article entitled “Rise of the Machines: Navigating the Disruptive effects of the Hyperconnected Economy and the Sharing Economy Era.

Thus, due to the amendment in SEBI regulations by making SM REIT available in India, Fractional ownership is changing the way investment pads can open door for new retail investors at the doorstep with minimum investment of INR 10 lakh. The fact that many people are able to access well-endowed and well situated investment properties through joint venture structures opens up a wide universe of investment opportunities across the whole investment grade spectrum.

The SM REITs presents more than a game-changer to the investors, and to the developers since it offers them with a proper exit strategy, the possibility of injecting more capitals into new schemes thereby constant boosting of the real estate industry. Moreover,  fractional ownership platforms (FoP) will present a new form of investing and trading in RE asset class and therefore, the returns will be determined by aspects such as the location of the asset, the class of the assets, and the profile of the tenants.

However, it has to be noted that structure of fractional ownership also involves some risks which have to be taken into consideration in the context of SM REITs. Other problems associated with the company include liquidity difficulties, tax issues in the operation of co-ownership, and the management of co-owners’ agreement that must be addressed to sustain investor confidence and protect the co-owners’ interest of the company.

The real estate sector in India is set for growth and innovation, driven by factors like urbanization, economic progress, and technological advancements. The synergy between innovative investment platforms and strong regulatory frameworks will be crucial in creating a dynamic and resilient real estate market that meets the changing needs of investors and stakeholders.

Chintan Patel, Partner at KPMG in India, and Boman R Irani, President of CREDAI, highlight that fractional ownership is more than just a new way of owning property; it's a means to unlock the vast potential of real estate investments in India. With a strong focus on regulatory oversight, transparency, and building investor confidence,  fractional ownership is poised to transform the landscape of real estate investments in the country, offering attractive returns, diversification advantages, and a fresh approach to property ownership.

In conclusion, the advent of small and medium-sized Real Estate Investment Trusts (SM REITs) and fractional ownership represents a pivotal moment in India's real estate narrative. This development is setting the stage for a more inclusive, transparent, and dynamic investment ecosystem, fostering sustainable growth and continual innovation in the sector.