Property Share files for Rs 472 crore IPO for India's second SM REIT scheme

Property Share Investment Trust, India's first registered Small and Medium Real Estate Investment Trust (SM REIT), has announced the launch of its second scheme, PropShare Titania, with an initial public offering (IPO) valued at Rs 472 crore.

The proceeds from this IPO, which features a fresh issue of units, will be primarily used for the acquisition of a commercial asset in Mumbai's G Corp Tech Park. The issue, conducted through the book building process, allocates 75% of the net issue to institutional investors, with the remaining 25% for non-institutional investors.

The investment manager, Property Share Investment Manager Pvt Ltd, has committed to invest a minimum of 5% of the units from its capital into the scheme. Additionally, all annual management expenses for FY26 have been waived, and a nominal fee of 0.5% will be charged beginning FY27. The asset is strategically located on Ghodbunder Road, Thane, part of the Mumbai Metropolitan Region, which is known for its strong social infrastructure and upcoming metro connectivity.

Co-founder Kunal Moktan expressed excitement about the launch, stating, "After the success of our first scheme of SM REIT, we are excited to launch PropShare Titania. This marks another milestone in our mission in creating a transparent, liquid, and institutional-quality real estate investment platform for individual investors. In a volatile equity market environment, rent-yielding commercial assets like SM REITs are emerging as an alternative investment opportunity for investors."

Co-founder Hashim Khan added, "PropShare Titania continues to offer investors access to a Grade A+ commercial asset at a cost-effective entry point. SM REITs are a new vehicle for real estate assets to be owned and traded, and we are proud to be embarking on this transformation with PropShare Titania." This emphasizes the scheme's appeal as an affordable entry into premium real estate investment.

PropShare Titania consists of a 4,37,973 square feet office space, fully occupied by varied tenants, including Fortune 500 companies such as Aditya Birla Capital and Concentrix. The office space, certified with LEED Platinum, WELL Health and Safety, and BEE 5 Star ratings, offers a weighted average lease expiry of 3.3 years. The tenant agreements include a 5% annual rental escalation, and investors are projected to receive distribution yields of 9.0% for FY26 and FY27, and 9.1% for FY28.

Kotak Mahindra Capital Company Limited serves as the sole lead manager for the Issue, while KFin Technologies Ltd acts as the registrar. The legal framework is supported by Cyril Amarchand Mangaldas and Trilegal, with Axis Trustee Services Limited as the Trustee. The units are expected to be listed on BSE Limited, offering investors a new asset class within the REIT framework.

SM REITs, introduced by the Securities and Exchange Board of India (Sebi), are a burgeoning asset class for properties valued between Rs 50 and Rs 500 crore. These REITs necessitate that 95% of earnings be distributed to unit holders, enhancing investor returns. Notably, SM REITs cannot invest in under-construction assets or land, ensuring investment in stable, income-generating properties.