Revolutionizing Real Estate: Pune-Based Platform Closes ₹10.40 Crore Commercial Land Deal
Making high-value real estate accessible to a broader audience through fractional ownership and property tokenization.
Fractional OwnershipReal EstatePuneAyodhyaCommercial LandProperty TokenizationReal Estate PuneJul 13, 2024
RealX's Ayodhya commercial land parcel of 31,646 sq ft (3516.22 sq yards) was valued at ₹10.40 crore, with 57 investors participating in the deal. Each investor invested between ₹50,000 to ₹25 lakh to acquire proportionate ownership rights in the property. Fundbezzie assisted RealX as a strategic partner in the deal.
The demand for fractional ownership is increasing in Ayodhya, driven by the growing tourism industry. According to Prudhvi Reddy, founder and CEO of Assetmonk, the fractional ownership model will involve a property being owned by six to eight co-owners, with a manager appointed to run the rental facility. The rental income will be divided equally among the co-owners.
The Securities and Exchange Board of India (SEBI) has announced that it will regulate fractional ownership platforms offering real estate assets through small and medium REITs (SM REIT). Registration of existing FOPs and new ones is mandatory under SEBI. FOPs allow investors to participate in real estate ownership with fractional shares and minimum investment ranging from ₹10-25 lakh.
Several fractional ownership platforms have started the process of registering under SM REIT regulations. According to ICRA, around 520 lakh square feet of office space is eligible for small and medium REITs listing, creating a monetization opportunity of ₹67,000 to ₹71,000 crore.
RealX's CEO, Manish Kumar, said that the company's biggest challenge was securing a prime property in a seller's market. However, the company completed the transaction within the expected timeline and even subscribed to a portion of the deal themselves. The company's contribution is now available for sale on the platform, boosting confidence in the system.
The Indian fractional ownership market is poised for rapid growth, with an estimated market value of ₹4,500 billion by 2026. RealX's deal is a significant step forward in making high-value real estate accessible to a broader audience through fractional ownership and property tokenization.
Frequently Asked Questions
What is fractional ownership?
Fractional ownership is the shared owning of an asset among a group of people. Each owner holds a part of the asset and typically shares the benefits and responsibilities that come with it.
What is the current value of the Indian fractional ownership market?
The Indian fractional ownership market is currently estimated at around $500 million.
What is the expected growth of the Indian fractional ownership market?
The Indian fractional ownership market is expected to grow 10 times in the next five years to surpass $5 billion by 2030.
What is the role of SEBI in regulating fractional ownership platforms?
SEBI has announced that it will regulate fractional ownership platforms offering real estate assets through small and medium REITs (SM REIT). Registration of existing FOPs and new ones is mandatory under SEBI.
What is the benefit of fractional ownership in real estate?
Fractional ownership allows investors to participate in real estate ownership with fractional shares and minimum investment, making high-value real estate accessible to a broader audience.
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