Many young entrepreneurs bullish on alternative realty asset classes
Sebi regulation, low-ticket size, long-term capital appreciation, monthly returns and stay options make the fractional ownership of properties lucrative to the small and moderate investors also
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Hyderabad: After learning lessons from the financial instability and job insecurity during the Covid-19 crisis, people started looking for side hustle ideas and second-income sources. Exactly at the same time, several startup entrepreneurs and new-generation realtors have come up with a slew of alternative real estate investment platforms that are taking wings now.
The most sought-after alternative real estate asset classes include co-working office spaces, co-living spaces, corporate housing, student housing, service apartments, holiday homes, farm houses, warehouses and logistics parks. The fractional ownership model allows the investors to own a share in diverse real estate portfolios at an investment starting from as low as Rs 5 lakh onwards.
The fractional owners will not only get a stake in the property's value, but also be identified as shareholders and enjoy various benefits including monthly returns, short-term stay options and long-term capital appreciation. "The fractional investment opportunities will soon become a common affair for residential property investors," says Sunil Chandra Reddy, President of NAREDCO Telangana Chapter.
“The fractional ownership is nothing but partially owning a big-ticket commercial property, jointly operated by a group of investors and pooled investment. These large commercial properties do not otherwise fall under the investment potential of retail investors. The real estate management company invites retail investors to invest a certain amount and take benefit from the appreciation,” he explained.
“The Securities and Exchange Board of India (SEBI) has recently brought guidelines for such fractional ownership of real estate assets as small and medium Real Estate Investment Trusts (REITs) under the SEBI REITs Regulations 2014. This will further expand the investment opportunities for individual investors and democratise access to a traditionally inaccessible asset class for smaller investors."
The Sebi regulation, low-ticket size, higher capital appreciation and timely returns made the alternative real estate deals lucrative to the small and moderate investors also. Most of the salaried professionals, particularly women, have been harnessing the power of alternative investment platforms to diversify their portfolios, cultivate financial literacy, and assert their presence in the investment realm.
In the ever-evolving landscape of finance, alternative investment platforms have emerged as a beacon of opportunity, democratising wealth creation and breaking down barriers that once restricted women from active participation in investment markets. Assetmonk, a Hyderabad-based alternative real estate investment platform, plays a pivotal role in facilitating women's participation in alternative investments.
Assetmonk is offering tailored solutions that cater to the unique needs and preferences of each investor. It leverages technology to provide user-friendly interfaces, transparent investment opportunities, and personalised guidance, empowering women to navigate the complex world of finance with confidence. It has multiple co-working and co-living projects in Hyderabad, Chennai and Bengaluru.
In an exclusive interaction with Bizz Buzz, Assetmonk Founder & CEO Prudhvi Reddy says, “We have three more assets under discussion, each in Pune, Bengaluru and Mumbai. Another asset in Hyderabad is at an early stage discussion. So far, we have raised close to Rs 350 crore through the platform from over 1,000 investors, while 35 per cent of them are from Hyderabad only.”
The company is planning to raise Rs 1,000 crore by the end of this year. Its rigorous due diligence process ensures to present the most promising opportunities to the investors. Empowered by technology, it enables investors to explore, research, and make informed investment choices. With a keen focus on an investor-centric approach, it is transforming the realty investment landscape.
FracSpace is another Hyderabad-based fractional investment and ownership real estate firm, which gives its customers an affordable option to own a unit in its diversified portfolio of properties from holiday homes to commercial spaces. It has lined up 18 properties across cities like Hyderabad, Goa, Varkala (Kerala) and Bengaluru in India, while it has plans to set up four properties abroad.
Fracspace Managing Director Unnath Reddy said, “Everyone wishes to buy a property but home loans scare them. Fractional ownership helps in fulfilling that dream without any bank loan. Our low ticket size of Rs 10 lakh per unit is attracting the customers. Apart from capital appreciation at the time of exit and short term stay options, we offer 6 per cent returns until possession and up to 10 per cent rental yields.”
“With the recent SEBI regulation, the trust levels have also increased on platforms like ours. We follow a 62-point checklist in legal documentation, and work with top advocates in each city. So far, we have invested Rs 20 crore on 10 properties in three cities of Indian portfolio alone. Out of this, around 30-35 per cent has been raised from the fractional investors during the last one year,” he added.
Hyderabad-based Laxmi Nivasam Developers is offering 8-12 per cent returns on purchase of 40-sq-yard land in the logistics park in Chittoor, Andhra Pradesh at a minimum investment of Rs 5.24 lakh. It has 2.25 lakh-sq-ft warehousing space in 10 acre land. It has invested Rs 50 crore to set up this facility in between the cities of Tirupati and Bengaluru.
