Fractional Ownership: The future of commercial real estate investment, says YieldAsset

Fractional investment, a recent trend that has gained acceptance in the real estate industry, is a new, safe and feasible way to pocket-friendly investment in office real estate.

Indians for long have invested their household savings in gold and real estate. You can't but agree more with Theodore Roosevelt: "Every person who invests in well-selected real estate in a growing section of a prosperous community, adopts the surest and safest method of becoming independent, for real estate is the basis of wealth." But, real estate investment for many urban households today is restricted to small plots of land or apartments. Residential apartment investments have not yielded well compared to investment in Grade-A office buildings due to lower rentals, in comparison to the commercial assets.

The Indian Grade-A Office real estate remained a preferred asset class for investors - even amidst 'Work From Home' adoption, owing to the asset's robust fundamentals and resilience. This segment has attracted equity investments to the tune of $15.4 billion in the last decade. The Indian market also saw two successful REIT listings of Embassy Office Parks and Mindspace REIT, totalling Rs 9,250 cr. In recent times, Blackstone and Brookfield also announced two biggest deals in the Indian real estate market, in the midst of the pandemic, amounting to around Rs 25,000 cr, acquiring office parks from Prestige and RMZ. Fractional investment, a recent trend that has gained acceptance in the real estate industry, is a new, safe and feasible way to pocket-friendly investment in office real estate. Several investors pool in their money, to buy Grade-A office property jointly. The assets are vetted legally and rigorous statutory and regulatory clearance checks are done, prior to offering them to such individuals investors for ownership. It works perfectly for investor's pocket and is expected to become a dominant investment trend in the market over the next 3-4 years in India. In advanced markets like the US, Singapore and Hong Kong, the concept has already seen significant traction.

The investors receive rental income in proportion to investments made in the property. Capital appreciation attained at the time of sale is also shared among the investors proportionately. The merit of fractional ownership is not just limited to owning an institutional-grade commercial real estate property but also:

•  Earning a steady, regular rental income which is usually 2-3 times more than rental from residential units.

•  Investment safety given the Grade-A quality of the underlying asset.

•  Improved liquidity as these units can be sold at any point of time on the resale platform, thus providing liquidity.

•  If invested for a considerable time, capital gains add unrivalled multiplier effect to overall returns.

Ownership of Grade-A commercial real estate which consists of office spaces, warehouses, factory etc requires substantial amount of capital, typically running into several billions of rupees! Hence, it has been the privy of the high net-worth individuals, family-offices and institutes. Fractional ownership in quality commercial asset class offers a great solution to someone looking for pocket-friendly investment, outside the volatility of share markets and low interest rates on fixed deposits. Hence fractional ownership will offer a whole new investment asset class to Indian households, who can own commercial property according to their budget. The fractional ownership concept is demolishing the monopoly of HNIs in commercial real estate investments.

By Riaz Maniyar, Co-founder, YieldAsset Real Estate Tech Pvt Ltd, a new age Proptech startup that enables fractional ownership of institutional grade Commercial Real Estate

https://www.yieldasset.com/

Real Estate News Bureau

Century Real Estate Sells Over 100 Plots in Ten Days at Century Greens

Over 65% inventory sold out in the second phase of the project during pre-launch

Century Real Estate, a leading developer and one of the largest landowners in South India, today announced the successful pre-launch of the Phase II of Century Greens, a premium plotted development in Bengaluru. While the Phase 1 of the project was sold out in just three months of its launch, Phase II witnessed an even greater reception with over 65% of the inventory being sold out in the first ten days.
 
With the onset of COVID-19, plotted developments have become a sought after choice for real estate investors and home-buyers alike due to factors such as land being an appreciating asset class and a growing demand for open spaces and low density projects. Moreover, buying a plot provides the liberty to the customer to construct a house tailored to their own taste and needs along with all the amenities typically available in a modern residential project. Several reports in the industry have also supported this trend.
 
Century Greens Phase I, launched in September 2018, has already witnessed a price appreciation of 35% reinforcing the fact that projects by Grade A developers that incorporate high build quality, self-sufficient ecosystems and provide a secure environment would continue to be the first choice for healthy appreciation.

With a focus on sustainable living, Century Greens is a 23 acre plotted development in the emergent micro-market of North Bengaluru. The specially curated unique green features of the project such as reflexology park, butterfly garden, organic plantations, pathways with plenty of green landscaping along with air pollution monitors and solar facilities provides families a fine balance of a natural retreat and multiple rejuvenation, fitness, socializing and leisure zones.
 
Century Greens comprises a state-of-the-art 10,000 sq. ft. clubhouse, located at the heart of the development that provides a grand experience of landscaped greens, indoor and outdoor amenities with easy access from every plot. From a lavish 250-seater party hall, gym, spa, convenience store, party lawns, indoor games area to swimming pool and kids’ pool, these amenities aim to provide an indulgent lifestyle.
 
The Northern Corridor in the Silicon Valley of India has experienced sensational growth and rapid infrastructural development which can be largely attributed to factors such as enhancement of physical, commercial and social infrastructure, smooth connectivity to prime locales in the city, and the proximity to IT growth corridors. This region has drawn the attention of investors, ever since Kempegowda International Airport became operational in 2008. Notably, Century Greens is just a 20 minutes’ drive to the Kempegowda International Airport.
 
Century Real Estate, a pioneer in the segment, has a plotted development portfolio comprising over 2.5 million sq ft of delivered and underway projects in both affordable and luxury segments. With over 3,000 acres of land bank and over 20 mn sq ft of residential and commercial assets under construction, the company represents more than $3 billion in asset value. Their development portfolio includes hotels, office spaces, residences, educational institutions and integrated townships.

 

Real Estate News Bureau