Author - Sahiba Neeru

Commercial Real Estate Trends in 2024

June 12, 2024

3 minutes read

As we enter into the real estate investment landscape, staying ahead of emerging trends is paramount for investors seeking lucrative opportunities. The year 2024 presents a plethora of trends shaping the industry, from the rise of digitalisation to shifting preferences in property ownership. Currently, the Indian Real Estate Market presents significant growth potential due to emerging trends. Its market size is expected to reach USD 1 trillion by 2030 and contribute 13% to India’s GDP by 2025. Among these trends, the commercial real estate market stands out as a focal point for potential growth and investment.

Let us go through this blog to understand the top commercial real estate trends.

What Are the Emerging Trends in Real Estate 2024?

Here are some of the top real estate market trends in 2024:

Rise in Workspaces

Commercial real estate, such as the demand for co-working spaces, is booming currently. Investors who have been investing in this sector for a long time are seeing substantial returns due to the longer leases and steady income. India’s co-working space market is expected to reach around USD 1.53 billion by FY2031 and is anticipated to grow at a CAGR of 13.47% since FY2024.

Emergence of Sellers’ Market

With increasing demand and limited supply, commercial spaces favour sellers. Prices are expected to rise as more people enter the real estate market, driving up the demand for commercial properties. The demand for fractional ownership has increased due to the rise of fractional ownership platforms like WiseX, PropShare and Strata, among others. Furthermore, the fractional ownership platform added 3,000 crore worth of AUM over the last 3 to 4 years.

Infrastructural Development

Urban cities including Tier II and III cities are becoming attractive investment destinations, due to government initiatives and economic growth. With improved infrastructure and job opportunities, these cities are expected to see a surge in commercial development. Over the last decade, Andheri has become a popular office location due to better connections to the suburbs and planned metro lines. Due to this, the job vacancy rates have dropped significantly, from about 18% in 2018 to around 10% in 2024. Additionally, the demand for flex office spaces is increasing in Tier 2 and 3 cities due to flexible working hours, hybrid work, and more. India’s flex office space is expected to reach $9 billion by 2028 with a 15% CAGR.

Integration of Technology

Technology is changing how commercial real estate works. Smart buildings with sensors and AI-driven decisions are making things more efficient and better for tenants. These tech advancements will bring big growth in the sector.

Focus on Sustainability

Investors care more about environmental and social factors when investing in real estate. They want buildings that are eco-friendly and have green certifications. According to the reports by JLL, sustainable buildings are expected to attract more occupiers due to their reduced operating and energy expenses. As more businesses commit to net zero goals, the demand for sustainable buildings will rise, and BREEAM-certified buildings may require less investment to meet these targets.

Impact of E-Commerce Changes Logistics

Online shopping is growing fast, so there is more need for warehouses and delivery centres. Real estate investors are putting money into these places to cash in on the booming online market in India. The e-commerce logistics market is growing rapidly and is expected to reach $7.24 billion by 2029. Furthermore, government initiatives like digital payment, UPI, etc. are playing a crucial role in the expansion of the market and thus leading to the growth of warehouses.

Growth of Commercial Real Estate in Key Metro Cities vs. Tier 2 Cities in India

While key metro cities lead in commercial real estate development, tier 2 cities offer promising growth prospects and opportunities for investors and businesses looking beyond the metros.

Key Metro Cities

In key metro cities like Mumbai, Delhi-NCR, Bengaluru, and Pune, the office real estate market is witnessing robust growth. This growth is primarily driven by the demand from the banking and financial services, IT sector and consulting firms. These cities dominate the market due to their well-developed infrastructure and availability of skilled labour. The metro cities are witnessing increased adoption of smart building systems and coworking management platforms, enhancing operational efficiency and tenant experience.

Tier 2 Cities

These cities offer lower real estate costs and are emerging as business hubs, attracting companies seeking to expand beyond the metros. The office real estate market in tier 2 cities is driven by factors such as the booming IT sector, rapid urbanization, and government initiatives to attract foreign investment. Furthermore, there is a growing emphasis on sustainable and green buildings in tier 2 cities, offering developers and investors opportunities to capitalise on the demand for environmentally friendly spaces.

The Bottom Line

As we look at the changing commercial real estate trends in 2024, it is quite evident that properties such as office spaces, warehouses and such, are great options for investors. By choosing a reliable investment platform and planning your investments carefully, you can set yourself up for success in the commercial real estate landscape. One such platform is Aurum WiseX, where you can invest in top A-grade commercial real estate properties. It evaluates over 150+ data points for selecting high-quality investment properties from which you can earn monthly rentals of up to 10%. To learn how you can invest in this sector, check out our comprehensive guide on commercial property investment.

Passive Income Using Fractional Ownership of Commercial Real Estate

June 12, 2024

Sahiba Neeru

Fractional Ownership

3 minutes read

Fractional ownership involves multiple investors pooling their funds to buy shares in a property through a Special Purpose Vehicle (SPV). This SPV acquires the property, and investors earn returns proportionate to their share of ownership. The property could be anything from a commercial property to a residential estate. This investment avenue allows you to earn income from real estate without the hefty upfront costs of sole ownership, thereby making it accessible to retail investors.

Let us go through this blog to understand how you can earn passive income using fractional ownership.

What Are the Different Types of Commercial Real Estate?

The following mentions the different types of commercial real estate via which you can earn passive income:

i. Office Buildings

Office buildings fall into 2 main types: urban and suburban. Urban office buildings are usually found in cities and include high-rise properties and skyscrapers. Suburban office buildings are generally smaller and often situated in office parks.

ii. Retail Spaces

Retail spaces are commercial areas where retailers and restaurants operate. These can be multi-tenant buildings, often anchored by a major tenant to attract traffic or single-use, standalone buildings.

iii. Industrial Properties

Industrial properties vary widely based on their purpose and size. They can be used for storage or as workplaces for various businesses. Generally, these properties are found in low-rise buildings in urban areas or industrial parks. Warehouses, cold storage, research facilities and showrooms are some types of industrial properties.

iv. Hospitality Properties

Hospitality properties offer significant investment potential. These properties serve travellers, providing temporary or short-term accommodations, lodging, entertainment and dining. Hospitality properties include boutique hotels, resorts, short-term rentals and more.

How to Earn Passive Income from Fractional Ownership?

There are various ways to earn passive income, but one of the easiest ways to do so is through a fractional ownership real estate investment platform. Follow the steps mentioned below to start your investment:

Step 1: Determine whether you want to invest in commercial or residential property.

Step 2: After deciding, research properly and select a platform that offers fractional ownership investment opportunities by looking at their past records, regulatory compliance, and more.

Step 3: Explore the different opportunities offered and evaluate the details like the value of the property, available shares, price per share, tenant profile, tenancy terms, rental yield, the platform’s credibility, and more.

Step 4: Complete your KYC process, sign the EOI (Expression of Interest), and deposit 5-10% of your investment amount in the Escrow account. It will help in securing your slot in the investment opportunity.

Step 5: Once your investment opportunity reaches full commitment, you will have to pay the remaining 95-90% of your investment during the drawdown period. After this, sign the private placement and offer documents.Now you will be able to track your investment on the dashboard of the platform and enjoy the monthly returns as one of the benefits.

Now you will be able to track your investment on the dashboard of the platform and enjoy the monthly returns as one of the benefits.

Is Fractional Real Estate Ownership a Good Investment?

Fractional ownership is considered a reliable investment for the following reasons:

It eliminates the barriers related to real estate investment, like capital risk and the high capital requirement.
Fractional ownership allows you to participate in real estate investment, earn high returns, and get the benefits of the rising property value of A-grade commercial or residential real estate.
It allows you to invest in new asset classes and helps you diversify your investment portfolio.

The Bottom Line

Earning passive income using fractional ownership is a smart investment choice. With this approach, you can access high-value commercial properties, enjoy consistent rental returns, and diversify your investment portfolio without hefty upfront costs. It is a great way to grow your wealth while minimising risks associated with traditional real estate investments.

Thus, if you want to avail this opportunity, consider Aurum WiseX as your fractional ownership guide. With our investment platform, you can earn monthly rentals of up to 10% and earn gains from capital appreciation.

Note: All information and/or data from external sources is believed to be accurate as of the date of publication. Note: All information and/or data from external sources is believed to be accurate as of the date of publication.

Advantages of Investing With WiseX

June 7, 2024

Sahiba Neeru

Personal Finance and Investments

2 minutes read

Deciding where to put your money is a big deal. It is not just about saving, but about finding the right investment platform that helps you achieve your financial goals. That is where WiseX can help.

When you invest with WiseX, you are not just putting your money somewhere and hoping for the best. You are entering a world of investment opportunities, tailored to your needs and preferences, that can grow your wealth while the investment amount being safe. Go through this blog to learn the advantages of investing with WiseX.

What Are the Benefits of Investing With WiseX?

Here is a list of the advantages of investing with WiseX which you can avail:

Discover Institutional Grade Investment Opportunities

We meticulously analyse more than 150 data points, ensuring that less than 1% of opportunities meeting our stringent criteria. By doing so, we minimise the risks associated with each investment and make sure that you are investing in top-notch properties.

Easily Navigate KYC and Start Investing

Our streamlined process allows you to complete KYC requirements and begin investing without any hassle.

Transparency

At WiseX, transparency is paramount. We provide detailed reports and complete disclosures throughout the investment process, so you know exactly where your money is going and how it is performing.

Flexible Returns

With over 25 years of experience in the real estate sector, WiseX delivers consistent monthly or quarterly returns on your investments, giving you peace of mind and financial stability.

Liquidity

Our tech-based platform enhances liquidity, offering multiple exit options for your fractional ownership investments. With WiseX, you have the flexibility to access your funds when you need them, providing peace of mind and financial freedom.

Proper Guidance

Investing can be daunting, especially for beginners. Therefore, WiseX provides access to expert advisors who will provide personalised guidance and end-to-end support to you throughout your investment journey.

Step-by-Step Procedure for Fractional Ownership Investment with WiseX

The following are the steps you must follow to invest in A-grade commercial real estate with WiseX:

Step 1: Browse through a variety of properties, across different locations and select one that suits your investment planning.

Step 2: Upon selection, you will see details like its value, available shares and price per share. Decide your investment amount based on your budget and risk preference.

Step 3: Complete KYC documents online and confirm your investment amount with your dedicated investment manager.

Step 4: After confirming, sign an EOI (Expression of Interest), and deposit 5% of your investment into an Escrow account, securing your investment opportunity.

Step 5: When the investment opportunity reaches full commitment, submit the remaining 95% of your investment.

Once you complete the above steps, WiseX will start the documentation process to finalise your investment. Upon successful investment, you will start receiving your returns on a monthly basis.

The Bottom Line

After understanding the advantages of investing with WiseX, it is clear that our platform offers a tailored approach to investment, minimising risks and maximising returns. Whether you are a seasoned investor or a novice, WiseX offers a seamless experience to all, enabling them to navigate the complex real estate landscape.

Unlocking Real Estate Opportunities: A Guide to Fractional Ownership Investment

May 20, 2024

Sahiba Neeru

Alternative Investments, Personal Finance and Investments

4 minutes read

Fractional ownership is when a group of people buy a share of an asset without having to pay its full price. By sharing the ownership, each investor gets the chance to partake in the benefits associated with the investment. Since COVID-19, there has been a surge in demand for fractional ownership among retail investors due to the market’s expanding potential.

So, whether you are a high-net-worth individual (HNI) or a retail investor, if you are interested in fractional ownership investment and seek to know the procedure, keep scrolling to discover the steps involved.

What Is Fractional Ownership?

Fractional ownership is an investment approach where multiple investors pool their funds to invest in valuable assets such as residential or commercial properties. Investors hold shares through a Special Purpose Vehicle (SPV), entitling them to passive ownership rights and benefits aligned with their contributions.

By owning shares in the SPV, which in turn owns the property, investors spread the financial responsibility, allowing them to access high-value assets while mitigating individual financial burdens.

What Is the Procedure to Invest in Fractional Property?

Here are the steps you need to follow to invest in a fractional property.

Step 1: Determine the Property Type

First, decide on the type of property you want to invest in, whether residential like luxury apartments or commercial spaces such as offices, warehouses, or retail outlets. For those seeking recommendations, commercial properties like office spaces, fueled by the growth of the Indian IT sector, are an ideal option, with net absorption expected to grow around 20-22% in 2024.

Step 2: Choose a Platform

Research online platforms offering fractional ownership opportunities and choose based on factors like track record, regulatory compliance, and property portfolios.

Among the leading platforms in India, Aurum WiseX stands out as a potential investment partner with over 25 years of experience in real estate.

Step 3: Explore the Opportunities

Upon selection, explore the opportunities offered by your platform and evaluate details like property value, available shares, price per share, rental yield, tenant profile, tenancy terms, and more. Determine your investment amount based on your budget and risk tolerance.

At Aurum WiseX, less than 1% of the opportunities pass the stringent selection criteria based on 150+ data points and get listed. One such exemplary offering is the Sky One Corporate Park, a Grade-A commercial real estate located in Viman Nagar, Pune.

Step 4: Complete Investment

After evaluating the property and investment details, one can invest by completing the following steps:

Complete the KYC verification and confirm the investment amount with which you want to proceed on the platform.
Upon completion of KYC verification, the platform sends an EOI (Expression of Interest), which you need to sign and deposit a portion of your investment, generally 5-10%, into the Escrow account. This will secure your investment opportunity.
Once the investment opportunity gets 100% commitment, the platform will ask you to submit the remaining investment amount during the drawdown phase. Following this, you need to sign the private placement and offer documents.

Now all you need to do is track your investments on the platform’s dashboard and wait for the benefits to roll out.

What Are the Points to Evaluate Before Fractional Ownership Investment?

Here are some key points you must consider before making a fractional ownership investment.

Micro-Market Trend of the Location

Consider investing in properties situated in prime locations where profitability can be maximised, attracting investors seeking premium returns.

As per a report of JLL India, the real estate sector in Pune has seen a year-on-year growth of rental rate by 5%. This is mainly because of the booming IT sector and the improvements in infrastructure and redevelopment projects in key areas. These factors can boost the value of properties. Thus, it is important to keep up with these trends when looking at properties online.

Tenant Profile

In residential buildings, tenants often leave quickly, causing unstable rental income. However, commercial properties leased by big multinational corporations (MNCs) offer stability due to long-term leases backed by security deposits and company guarantees. Selecting successful and reliable tenants is crucial for a steady income.

Legal Compliance

Verify the permissions and legality of the facilitator to operate in the fractional investment domain. With large sums of money involved, it is crucial to mitigate the risk of fraud or any possible legal hiccup.

ROI Analysis

Perform a comprehensive Return on Investment (ROI) analysis before prioritising any fractional ownership investment option. To estimate your potential ROI for fractional real estate investments, consider factors such as the IRR of the property, capital appreciation prospects, management fee, security deposit, and monthly return yield.

For instance, you can analyse the ROI of the Sky One Corporate Park of WiseX by going through their current investment opportunity model.

Management and Transparency Factors

Prioritise fractional investment opportunities with tech-enabled management and online tracking capabilities. Additionally, look for transparent exit options without hidden clauses.

The Bottom Line

Through fractional ownership investment, you get the opportunity to own a high-value asset that will enable you to pool money and diversify your investment portfolio are you ready to put this investment into practice? Consider Aurum WiseX to start your fractional ownership journey and own a piece of commercial real estate. By joining us, you can secure a share of lucrative properties and earn monthly rentals of up to 10%. Furthermore, you can leverage capital appreciation with net returns in a range of 12-18% IRR.

How Is Fractional Ownership Better Than Stocks?

May 15, 2024

Sahiba Neeru

Fractional Ownership, Personal Finance and Investments

3 minutes read

When it comes to investment, people are drawn to a diverse array of investment options, ranging from traditional stocks to innovative avenues like fractional property ownership.

While stocks have long been a popular choice, fractional ownership investment presents a unique opportunity to benefit from real estate assets in smaller portions. This appeals to a wide range of investors, from experienced individuals seeking to diversify their portfolios to affluent newcomers looking for alternative avenues.

In this blog, we will walk you through why fractional ownership is better than stocks in today’s financial landscape.

What Is Fractional Ownership?

In fractional ownership, various investors come together and pool their money to buy top-quality commercial or residential real estate. Each investor gets a certain portion of the equities of the Special Purpose Vehicle (SPV) that owns the property, granting them a proportional stake in ownership. This collaborative method makes investing in sizable properties achievable for a broader range of participants.

Advantages of Fractional Ownership

Following are some of the benefits of fractional ownership that make it a smart investment choice for you:

Access to High-Value Properties

It enables you to invest in high-quality real estate properties that might have been financially out of reach through traditional ownership. This means you can own a portion of equities of the SPV, holding property such as office buildings, retail spaces or industrial warehouses in desirable locations, giving you exposure to valuable real estate assets.

Lower Investment Costs

Fractional ownership reduces the capital required to invest in real estate. Instead of buying an entire property, you can invest in a fraction or a share of it, making it more accessible for investors with smaller budgets.

Professional Management

Many fractional ownership platforms partner with professional property management services, specifically tailored for commercial real estate. These services handle tasks such as tenant leasing, property maintenance and asset optimisation, ensuring that the property is well-managed and maximising its potential for rental income or resale value.

Flexibility and Easy Selling

With fractional ownership, you have the flexibility to sell your share in the property if you want to cash out. This gives you the freedom to adjust your investment strategy, refine your portfolio or take advantage of changes in the market.

How Is Fractional Ownership Better Than Stocks?

Fractional ownership offers several advantages over traditional stock ownership, making it a compelling option for investors. Here is why you should invest in fractional ownership over stocks:

Steady Returns

Stock market earnings rely on market ups and downs, which is highly unpredictable. However, with fractional ownership, returns stay stable over time. Furthermore, fractional ownership lets investors put money into top-notch properties leased to big companies. Long lease deals mean investors get a steady stream of rental income.

Multiple Benefits

Fractional ownership comes with multiple perks, including income from monthly rent and asset value growth when selling. This unique blend of income stream and capital appreciation distinguishes it as a superior investment choice compared to stocks.

Smart Research

When investing in the stock market, you usually spend a lot of time researching companies. However, with fractional ownership, real estate experts handle the research, ensuring good property deals. Properties listed for fractional ownership go through a strict evaluation to guarantee high returns.

Diverse Opportunities

Diversification is another perk of fractional ownership. Unlike stocks, where all investments are tied to market trends, fractional ownership lets you spread your money across different properties in various places and sectors, reducing overall risk.

The Bottom Line

Overall, fractional ownership is considered better than stocks by several expert investors due to its ability to provide stable returns, in terms of consistent rental income and potential asset value growth. Fractional investment in real estate allows diversification across various properties and sectors, reducing overall investment risk. Moreover, the research process associated with fractional ownership is streamlined, thanks to expert inputs.

Speaking of experts, Aurum WiseX is one of the trusted investment platforms offering fractional ownership opportunities. Therefore, if you are looking for a smarter investment option, fractional ownership through Aurum WiseX could be the way to go.

Frequently Asked Questions

Which investment option has more risk fractional ownership or stock?

Fractional ownership in real estate and stocks both carry risks. However, the level of risk for fractional ownership investments depends on factors such as market fluctuations, property management challenges, and legal complexities, while stocks face volatility, economic factors, and global events.

How does fractional ownership work?

In fractional ownership, investors contribute funds to purchase a share of the SPV owning the real estate asset. Each investor holds a proportional stake in the asset and receives benefits such as rental income according to their ownership percentage.

What are some of the benefits investors can expect from fractional ownership?

With fractional ownership, you will be able to invest in top A-grade properties with an affordable investment amount. Furthermore, you will be able to earn monthly rental income and leverage potential capital appreciation upon the sale of the asset.

How to Plan Commercial Property Investment?

May 6, 2024

Sahiba Neeru

Fractional Ownership

1 Comment

3 minutes read

If you are seeking different ways to broaden your financial portfolio and aiming to build lasting wealth, consider commercial property investment as a lucrative avenue to achieve your financial goals. Commercial real estate comprises properties which are used for various business purposes, such as office spaces, industrial warehouses, retail centres, multifamily apartments, hotels and more. Unlike market-linked instruments, this investment avenue is a stable source of income even during volatile market conditions.

So, if you are someone looking forward to investing in commercial real estate property, keep reading this blog.

How to Invest in Commercial Property?

The commercial property investment process involves the following steps. Take a look.

Step 1: Understand Your Investment Goal

First, you must determine what you want to achieve through your investment in commercial real estate. Understanding your investment goals in commercial real estate involves considering several crucial factors. Here are the key things to know before investing in commercial real estate property:

Property Type

In the commercial property market, you have options like office buildings, warehouses and retail spaces. Currently, office space properties are often seen as a preferable choice among investors because they tend to yield an average yearly return of 8% to 10%. Properties are divided into prime (in big cities with top tenants), secondary (in less central areas) and tertiary (in outskirts with limited tenants).

Location

The location of your property is one of the crucial factors to consider. You must make sure there is not too much competition in the area. Additionally, keep an eye on upcoming infrastructure projects that could boost demand.

Property Size

Think about how much you can afford and how big of a property you need. Larger properties might be harder to lease and more costly to maintain.

Documentation

Check all the legal documents carefully. This includes mortgage papers and ownership transfer documents if you are buying a resale property. It is smart to get help from an agent to understand all the costs involved.

Step 2: Do Proper Research and Analysis

After you have set your criteria and investment goals, you must do thorough research and analysis to find the best property.

Demand and Supply

Check how strong the demand is and how much inventory is available. Look for any oversupply or undersupply of commercial properties in the market.

Competition

See who else is in the market and what they are doing. Understand their strengths and weaknesses, how they are pricing properties and attracting tenants.

Occupancy and Rent

Verify the occupancy and rent rates in your desired area and compare them with other markets. Monitor if rents are staying the same, going down or rising.

Taxes and Expenses

Figure out how much you will spend on operating expenses and taxes. Understand how this affects your cash flow and return on investment.

Growth Potential

Analyse demographic and economic factors in your target area. Find out if there are any major infrastructure projects planned. These could change the value and landscape of the area and your property.

Step 3: Evaluate the Financial Metrics

The next step to successful investing is understanding key calculations and formulas. These metrics will help you understand the profitability and performance of your commercial property investments. Here are some important formulas you should know:

Net Operating Income (NOI)

This calculation accounts for all revenue and expenses associated with a property, providing you with a clear picture of potential earnings after operating costs like property management fees, repairs, utilities, insurance and taxes.

Cap Rate (Capitalization Rate)

The cap rate is used to estimate the value of income-producing properties by comparing the net operating income to the property’s asset value. It helps investors assess the potential return on investment.

Internal Rate of Return (IRR)

IRR measures the interest you can make on every rupee you invest in the property throughout its ownership. It shows the potential growth rate the property can achieve and estimates the potential long-term yield.

Step 4: Assess the Deal

Once you have finished researching and analysing the market, it is time to hunt for properties that match your goals. You can use online platforms and property brokers to help you find suitable properties. These resources will pinpoint options based on what you are looking for. Additionally, you can connect with your family, friends, colleagues or business partners for property recommendations. They may know of opportunities that align with your objectives.

Step 5: Negotiate and Make an Offer

Once you have evaluated and shortlisted your preferred properties, you can reach out to the seller or broker to initiate negotiations for purchasing the property.

The Bottom Line

Investing in commercial property is both rewarding and challenging, necessitating preparation, research, negotiation and financing. By adhering to the guidance provided in this blog, you will be able to discover the ideal property that aligns with your objectives. With these insights, you can confidently make informed decisions and pursue successful commercial real estate investments tailored to your needs.

Are you ready to take the next step to diversify your investment portfolio with commercial property investment? If so, look no further! At Aurum WiseX, we offer hassle-free access to top-notch A-grade commercial properties through fractional ownership. Our platform meticulously evaluates over 150+ points to bring you the best commercial properties.

So, say goodbye to the complexities and uncertainties, and take control of your financial future with confidence with Aurum WiseX!