Fractional Ownership in India
A fractional ownership platform identifies suitable high-value properties and invites investors to own fractions of the same. CRE has seen an annual appreciation of 11.6 percent for the past few years in India.
When inflation rates are high, there is a greater demand for hard assets. In India, 85% of commercial real estate has been owned and invested by Institutional Foreign funds and HNI's, which leaves little room for retail investors to participate. Foreigner Investors have taken advantage of this growth with Brookfield, Black Stone, and Maple Trees. To disrupt this space we have very few fractional ownership companies in India offering a fractional ownership investment opportunity.
Barriers to entry for Retail Investors in CRE
The high ticket size of an A-grade property ranges from 40-50 crores making it difficult for a retail investor to purchase unless they have the necessary funds.
Traditionally, Retail investors lacked the expertise of understanding the building, the dynamics of a micro-market, the evaluation of the supply and demand, and the tenancy rate.
Investors prefer more liquid options with greater ease in exchanging. Traditionally, liquidity has come only when selling a property.
Investing in real estate can be complicated and time-consuming. Tenant management is one aspect that requires a lot of negotiation, legal work, and expertise for an investor to manage well.
Property management
Fractional property investment means investing in the building and its future. Property management includes building management team, risk mitigation, structural evaluation.
So Fractional Ownership investments are the solution to all these problems and a way to erode the barriers to entry. Investing in Fractional Real Estate pushes Retail Investors on the same competitive platform as Institutions or fund houses with regards to participating in these opportunities.
What WiseX does
WiseX combines the small tickets of a large number of investors, thereby having the quantum to pursue such assets
WiseX Deals in ticket sizes of 25 lakhs, which means they have a larger target market. This enables them to provide liquidity much sooner and not be contingent on the sale of properties before selling their shares.
WiseX provides end-to-end management by identifying, shortlisting, coordinating, completing all the legal work, structural diligence, tenant negotiations, and building maintenance.
The Process
Investing in Fractional Ownership Commercial Real Estate is as simple and effective as investing in a mutual fund. There are many benefits to this type of investment, including higher yields (8-10%), annual appreciation rates for the asset you have invested your money into, grade A assets that will not default because MNC tenants secure them.
The Individual goes on to the WiseX platform and identifies an opportunity, then completes the KYC
They review the documents from their End, and we provide them with a legal diligence report.
If the person is comfortable with it, they can sign a document and transfer funds to become investors.
This can be done digitally or manually with the guidance of the investment managers.
Fractional Ownership Commercial Real Estate in India today is focused more on Retail Investors. As it matures further, Fractional Investments companies in India offer a solution for more credible developers to seek a reliable source of funding and promote real estate as an asset class in the country.
