India’s real estate investment landscape is evolving rapidly, and Small and Medium Real Estate Investment Trusts (SM REITs) are leading this transformation. According to CBRE South Asia’s latest report, From Niche to Next Wave: SM REITs Forging Real Estate Investment Frontiers, the SM REIT market in India is projected to surpass USD 75 billion, tapping into over 500 million sq. ft. of eligible office, logistics, and retail assets. This shift signals a growing appetite among investors for more structured, accessible, and transparent ways to invest in commercial real estate.
Bringing High-Value Assets to Small Investors
REITs have long allowed investors to own shares of income-generating real estate without directly managing properties. SM REITs take this concept further by focusing on smaller commercial assets valued between Rs. 50 crore and Rs. 500 crore. These vehicles democratize access to premium properties, enabling individual and institutional investors alike to participate in the commercial real estate growth story. With relatively low entry points, SM REITs are making high-quality office, retail, and logistics assets accessible to a broader base of investors.
A Boost for Institutionalisation
Anshuman Magazine, Chairman and CEO of CBRE India, Southeast Asia, Middle East & Africa, explains that SM REITs are creating a more structured and transparent framework for fractional property ownership. “This segment is set to deepen the institutionalisation of India’s commercial real estate,” he says. By bringing mid-sized properties under regulated oversight, SM REITs can elevate property management standards, enforce ESG compliance, and encourage professional governance, all of which strengthen the overall ecosystem.
Investment-Grade Assets Remain the Driver
The report highlights that premium office assets will continue to anchor institutional interest. Grade A+ properties, offering top-tier specifications and modern infrastructure, form the backbone of a high-quality SM REIT portfolio. Rami Kaushal, Managing Director at CBRE, points out that SM REITs can bridge a gap between direct ownership and large-scale REITs, allowing investors to benefit from stable rental income and potential capital appreciation while diversifying their exposure across smaller, high-quality assets.
Regulatory Framework and Market Maturity
In 2024, SEBI amended the Real Estate Investment Trusts Regulations to provide a framework specifically for SM REITs. This regulatory clarity ensures investor protection, promotes governance transparency, and encourages wider adoption. Yet, long-term success hinges on consistent performance, clear disclosure, and sustained investor confidence. “Investors must conduct rigorous due diligence, evaluating both the investment manager’s capabilities and the strength of the underlying assets,” Magazine notes.
Benefits Across the Value Chain
SM REITs offer strategic advantages for all stakeholders. For investors, they provide access to premium real estate, potential passive income, and capital growth. For developers, SM REITs offer a mechanism to efficiently recycle capital, freeing resources for new projects while tapping into a broader investor base. As India’s commercial real estate sector matures, SM REITs are positioned to become a cornerstone of structured investment, facilitating a more organized, liquid, and efficient market.
Looking Ahead
As India’s REIT and SM REIT ecosystem continues to develop, the combination of regulatory oversight, investor interest, and a growing pool of high-quality assets is set to redefine commercial real estate investment. From niche products to the next wave of growth, SM REITs are opening doors for investors, developers, and the industry at large, creating a new chapter in India’s property story.
