16 Jan 2018
Featured in Economic Times on 3rd January 2018.
PropertyShare is eyeing expansion into multiple geographies, countries and asset classes including commercial, residential, retail, industrial (warehousing) and hospitality.
The Fractional Property Ownership Platform Property Share on Tuesday announced that it aims to cross Rs. 500 crore in Assets Under Management (AUM) this year.
The platform aims to become India's largest and alternative investment platform, with its presence in every Tier I city in India within two years.
Property share is eyeing expansion into multiple geographies, countries and asset classes including commercial, residential, retail, industrial (warehousing) and hospitality.
In recent times, the commercial real estate has been gaining ground with the advent of online platforms as they offer better investment options with monthly and aggregated returns on rent-generating properties in commercial hubs.
Moreover, in the last 15 years, approximately 500 million square feet of Grade A offices have been developed and occupied by domestic and international tenants mostly in the tech hubs of Bangalore, Pune, Gurgaon, and Hyderabad.
Monetizing these assets has become easier as the government watered down foreign investment parameters in the sector allowing international real estate funds, sovereign wealth funds and pension funds to participate in income generating real estate.
In the absence of a Real Estate Investment Trust (REIT), the retail investor on the ground, however, has largely been left out of this product leaving him with a two-dimensional investment option of a fixed interest bearing and fully taxed fixed deposit and a volatile stock market.
"There is no product that provides seven to eight percent current yield and an equity upside on capital appreciation. The tenanted office provides the returns but is inaccessible to the retail investor thanks to large ticket sizes of 10-50 crores, lack of liquidity and the inability to quantitatively analyse commercial lease structures. We are solving all that in Property Share," said co-founder and CEO, PropertyShare, Kunal Moktan.
One of the most interesting patterns seen in investment on the platform is in the proportional growth in the number of NRI investors.
In its initial year, the platform's NRI investors comprised a mere three percent against 97 percent native investors; since then, the platform has seen a 13x increase in the share of investment from NRI investors, reaching 39 percent of the total investment in 2017.
"We've experienced an organic growth in the number of NRI investors. The reason for this development is quite simple: NRIs have the money but not the time to get involved in sourcing, negotiating, diligencing, closing, managing and exiting the investment. At Property share we use a mix of tech and boots-on-the-ground valuation to bring the most lucrative opportunities with minimal hassle," Moktan added.