For the first SM REIT scheme Rs. Property shares DRHP files for IPO of Rs 353 crore.

Property Share Investment Trust (“PSIT”), India’s first registered Small and Medium Real Estate Investment Trust (SM REIT), has filed a draft trust offer document and a draft scheme offer document for PropShare Platina, the first scheme under PSIT. 353 crores.

Propshare Platina comprises of 246,935 sq ft of office space in Prestige Tech Platina, a LEED Gold office building located on Outer Ring Road (ORR), Bangalore. It is proposed to be fully leased to the US-based tech company through a new 9-year lease with a 4.6-year weighted average lock-in and 15% rent increases every three years. The scheme offers investors an estimated FY26 distribution yield of 9.0%.

“We believe SM REIT’s model of investing directly in focused income-producing assets opens up the real estate universe at yields hitherto unavailable to public investors,” said Kunal Moktan, Director, Property Shares.

Property Shares is the first firm to get an SM REIT license after securities market regulator, the Securities and Exchange Board of India notified the SM REIT Rules in March 2024.

“Property share is also at least 5% units of the scheme or Rs. 17.6 crore from its capital as IM contribution in the offer. The IPO is purely a fresh issue of platinum units with no offer-for-sale component,” the company said.

The proceeds of the offer are proposed to be used primarily for the acquisition of Prestige Tech Platina assets by Platina SPV, with the remainder to be used for other general corporate purposes.

“With the introduction of SM REITs, the regulator has introduced a regulatory framework for a new asset class for a diverse class of public investors. We believe that PropShare Platina – India’s 1st SM REIT scheme, offers investors an opportunity to invest in Grade A pre-leased commercial properties in ticket sizes starting from Rs 10 lakh,” said Hashim Khan, Director, PropertyShare.

For the first scheme, the Investment Manager, PropShareInvestment Manager Private Limited (“Property Share” or “IM”) has decided to waive all annual management charges (including Investment Management Fee and Property Management Fee) for FY25 and FY26 and charges will take A nominal fee of 0.25% in FY27 and 0.30% from FY28.

Outer Ring Road is the largest office market in Bangalore with 34% of the total office stock according to Jones Lang LaSalle research and houses offices of various multinational companies including Adobe, Amazon, Google, Samsung, Cisco, JP Morgan, Morgan Stanley, Wells Fargo. other

SM REITs has been approved by the Securities and Exchange Board of India for Rs. There is a new asset class regulated as a subclass within the REIT structure for assets between 50-500 crores. Similar to REITs, SM REIT units are required to be listed on stock exchanges but with a higher minimum lot size of Rs. 10 lakhs. SM REITs are not permitted to invest in under-construction assets or land and must distribute 95% of earnings to unit holders as distributions.