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PropsAMC, the asset management services and data intelligence division of Square Yards claimed to have raised over Rs 100 crores for its first Grade A commercial project in Hyderabad. The project is Square Yards' first foray into the fractional product sector, and it received an average financial contribution of INR 40 lakhs from a group of more than 250 investors amounting to more than 100,000 square feet.
Investors in the Hyderabad commercial property will receive 8% gross returns on their capital with an expected XIRR of 14-15%, post fees and before taxes. Fractional ownership investment in commercial assets is gradually emerging as the next big thing for consumers hoping to create solid wealth as the commercial real estate industry undergoes a digital transformation. It has made the commercial real estate sector accessible to investors from the middle class who wish to take advantage of high-yielding assets alongside HNIs.
There are currently a few firms collectively managing approximately INR 1200Cr asset under management (AUM) in India's still-developing fractional ownership market. Most firms only invest in commercial yielding asset at the moment. Some of the most notable companies are Restack, Myre Capital, h-Bits, Strata and B-hive.
Fractional ownership refers to owning a portion of an asset instead of the entire asset. This concept has gained popularity in recent years, especially in the real estate sector, as it offers individuals the opportunity to invest in high-value assets without having to bear the full cost of ownership. Fractional ownership typically involves a group of individuals pooling their money to buy a property or asset. The asset is then divided into smaller shares, with each investor owning a fraction of the asset based on the amount of money they have contributed.
One of the main benefits of fractional ownership is that it allows investors to diversify their portfolio without having to invest large sums of money. It also provides them with the opportunity to use the asset for a certain amount of time each year, which can be beneficial for individuals who want to enjoy the benefits of owning a high-value asset without the full cost. However, there are also some challenges associated with fractional ownership. One of the main challenges is the lack of clear regulations and legal frameworks governing fractional ownership, which can lead to disputes and conflicts between investors. Additionally, finding suitable co-owners who share similar investment goals and risk tolerance can also be a challenge.
Despite these challenges, fractional ownership in India is gaining popularity, especially in the real estate sector. As the market matures and regulations become more clear, fractional ownership is likely to become a more accessible and viable option for individuals looking to diversify their portfolio and invest in high-value assets.
Propsamc by Square Yards is a comprehensive property management and asset management service provided by Square Yards, a technology-enabled transaction and aggregator platform for global real estate. This service offers a one-stop solution for property owners to manage their properties, including leasing, rent collection, maintenance, legal compliances, and asset valuation. With its user-friendly interface and innovative technology solutions, Propsamc by Square Yards aims to simplify the property management process and provide a hassle-free experience to its clients.
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