Realty stocks soar on Sebi proposal to formalise fractional ownership

Sobha Developers gains most at 11.5%, DLF and Mahindra Lifespace add over 7% each; BSE Realty index soara 4.3%, most among the 19-sectoral sub-indices

The BSE Realty index on Monday soared 4.3 per cent—most among the 19-sectoral sub-indices—buoyed by the proposal to formalise fractional ownership of real estate in the country.

The Securities and Exchange Board of India (Sebi) on Friday issued a discussion paper proposing to regulate online platforms offering fractional ownership in real estate, a model already popular in countries such as the United States and UAE.

The market regulator has stated that such fractional ownership of real estate assets was proposed to be brought as MSM (micro, small, medium) REITs under Sebi (Real Estate Investment Trusts) Regulations.

This model would allow investors to own a fraction or a small share in a real estate asset like buildings and office spaces, which could include warehouses, shopping centres, conference centres.

Sobha Developers gained the most at 11.5 per cent, followed by DLF and Mahindra Lifespace, which added more than 7 per cent each.

Analysts said if implemented well the proposal will give a fillip to the country’s real estate sector as it will allow realty developers to monetise assets worth as little as Rs 25 crore.

The BSE Realty index is one of the best-performing index over the past one year, with gains of 24 per cent. Strong operational performance in FY23 has mainly aided these gains.