REITs, fractional ownership to play bigger role in 2026, boost retail participation: Sudeep Bhatt of Whiteland Corp

India's real estate sector, traditionally viewed as an opaque and illiquid asset class, is undergoing a significant transformation. The resilience demonstrated in 2025, largely attributed to strong demand in premium housing and office spaces, signals a maturing market. This evolution is set to accelerate in 2026, with predictions of higher institutional inflows and the increasing adoption of innovative investment instruments like Real Estate Investment Trusts (REITs) and fractional ownership, as highlighted by Sudeep Bhatt of Whiteland Corp.

Historically, real estate investment in India was dominated by high-net-worth individuals and large corporations, characterized by substantial capital requirements, lack of transparency, and difficulty in exiting investments. The sector often functioned outside a stringent regulatory framework, leading to investor apprehension. However, a series of reforms and economic growth drivers have paved the way for a more organized and accessible market. The rapid urbanization, rising disposable incomes, and the government's push for infrastructure development (like the Smart Cities Mission and National Infrastructure Pipeline) have consistently fueled demand across residential, commercial, and industrial segments.

The introduction of REITs in India, regulated by the Securities and Exchange Board of India (SEBI) through the SEBI (Real Estate Investment Trusts) Regulations, 2014, marked a pivotal moment. REITs are companies that own, operate, or finance income-producing real estate. They make it possible for individual investors to earn dividends from large-scale commercial real estate investments without having to buy, manage, or finance any properties themselves. Similar to mutual funds, REITs allow smaller investors to participate in high-value, rent-yielding properties. Fractional ownership, a more recent phenomenon, further democratizes this access by allowing multiple investors to collectively own a share of a single high-value asset, such as a commercial office space or a luxury vacation home, often managed by a professional firm.

Key stakeholders in this evolving landscape include: **Developers** (like Whiteland Corp) who build and manage properties, increasingly focusing on high-quality, rent-yielding assets suitable for REITs and fractional ownership. **Investors** range from retail individuals seeking diversification and lower entry barriers, to High Net Worth Individuals (HNIs) and large domestic and foreign **institutional investors** (e.g., pension funds, sovereign wealth funds) looking for stable, long-term returns. **Regulators** like SEBI play a crucial role in ensuring transparency and investor protection for REITs. The **Real Estate (Regulation and Development) Act, 2016 (RERA)** has also been instrumental in bringing accountability and transparency to the broader real estate sector, creating a more favorable environment for all types of investments. The **Government** itself is a key stakeholder, through its policies on infrastructure, housing, and foreign investment.

This shift holds immense significance for India. Economically, it contributes to the formalization and institutionalization of a sector that accounts for a substantial portion of the GDP and employment. It deepens India's financial markets by introducing new asset classes and investment avenues, attracting both domestic and foreign capital. The increasing institutional inflows, often from global funds, signify growing confidence in India's real estate potential. Furthermore, the focus on ESG (Environmental, Social, and Governance) assets reflects a global trend towards sustainable investing, which can drive the development of green buildings and socially responsible projects, aligning with India's climate goals.

The future implications are profound. The growth of REITs and fractional ownership is likely to enhance liquidity in the real estate market, reduce speculation, and provide more stable, yield-based returns. It could lead to increased professionalization in property management and development, as institutional standards become more prevalent. Moreover, it offers a pathway for retail investors to participate in high-value commercial real estate, which was previously inaccessible, thus promoting financial inclusion. This trend, coupled with infrastructure-led growth corridors, will reshape urban landscapes and investment patterns, making India's real estate market more robust, transparent, and globally competitive.

From a policy perspective, the SEBI (REIT) Regulations, 2014, and the RERA Act, 2016, are foundational. The Foreign Exchange Management Act (FEMA) governs foreign investment, allowing overseas funds to invest in Indian REITs and other real estate avenues. Union Budgets often contain provisions related to infrastructure spending, housing incentives, and capital market reforms that directly influence the sector. The evolving landscape necessitates continuous regulatory vigilance to ensure investor protection and market integrity.