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Fractional Ownership in India

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Myrecapital
Fractional Ownership in India

Commercial Real Estate has seen a steady appreciation in India totalling to 11.6% over the last few years. As inflation has been on a journey to peak, the demand for hard assets has gone through the roof. Eighty-five percent of commercial real estate is owned and invested in by Institutional Foreign funds and HNI’s, taking advantage of this growth with Brookfield, Black Stone and Maple Trees.

This has left little space for local retail investors to participate. Part of this is the responsibility of the very few fractional ownership companies in India. A fractional ownership investment opportunity can be accessible through fractional ownership platforms. These platforms identify high-value properties and invite investors to own parts of these properties. 

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Entry barriers for Retail Investors in CRE

1. High ticket size

An A-grade property comes with a high ticket size that ranges between 40 and 50 crores. Unless retail investors already have the necessary funds, it is difficult to make the first purchase. 

2. Lack of expertise

Most retail investors struggle with making judgments about the property, the micro-market dynamics, supply-and-demand evaluation and the tenancy rate. 

3. Lack of liquidity

Retail investors prefer liquid options that can be exchanged more easily. Usually, liquidity comes into question only when selling property.

Also Read: Amazing benefits of hiring a real estate agent

4. Tenant management

Negotiation, legal requirements, and paperwork are challenging, complicated and time-consuming, which discourages many potential investors. 

5. Property management

Building management, risk mitigation, and structural evaluation are better carried out by property management teams. Retail investors are less aware of the alternative option of fractional property investment

Myre combines the quantum to pursue high-value assets using smaller tickets from numerous investors. Dealing with ticket sizes of 25 lakhs, Myre has a larger target market, to which it can provide various advantages: quick liquidity and non-contingency on the sale of properties before the selling of their shares.  Providing end-to-end management from identifying, shortlisting, coordinating and completing legal work to showing structural diligence, and handling tenant negotiations and building maintenance. 

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