SEBI: Strata SM REIT surrenders certificate of registration as SM REIT

Strata SM REIT has surrendered its certificate of registration as an Small and Medium Real Estate Investment Trust (SM-REIT) and will not hold out or represent itself as a SEBI regulated intermediary or SM REIT, the market regulator said on Wednesday.

SEBI said it has accepted surrender application of Strata SM REIT, following certain news reports and review of certain legal proceedings against the latter's promoter. SEBI was engaged with Strata SM REIT, its independent director, compliance and other officers and the trustee, the regulator said.

"Basis the engagement and discussions thereat, Strata SM REIT has surrendered its certificate of registration as an SM REIT and will not hold out or represent itself as a SEBI regulated intermediary or SM REIT," SEBI said.

Strata SM REIT was looking to initially launch up to six SM REIT schemes in 2025-26, and gradually increase it to one scheme every month. In January this year, it had received the official license from markets regulator to launch its SM-REIT. 

SEBI noted that Strata SM REIT, as on date, has not launched any SM REIT schemes nor migrated any pre-existing fractional real estate entities as a SM REIT Scheme.

"This communication is being issued in the interest of investors advising them to exercise caution while dealing with the entity," SEBI said.

SM REITs were introduced by SEBI as a first-of-its-kind innovative asset class in March 2024 to encourage smaller real estate investments for commercial real estate projects with a minimum asset value of Rs 50 crore, compared to Rs 500 crore for REIT. 

In January, Sudarshan Lodha, Co-founder & CEO, Strata, said: "We are happy to announce that we have received the SM REIT license from SEBI, which marks a significant step towards our goal of making commercial real estate accessible to all investors." 

"SM REITs open up new avenues for investment opportunities for Indian investors, with the minimum investment barrier lowered to INR 10 lakh. Over time, we foresee the SM REIT industry being as significant for India as the mutual fund industry today is,” he had said.