PropsAMC, the asset management services and data intelligence arm of Square Yards, said it has raised INR 100 Cr+ AUM for its first Grade A commercial project in Hyderabad in a record time of three months. The project is Square Yards’ maiden venture into the fractional product category, with an average investment participation of INR 40 lakhs from a pool of over 250 investors totalling to 100,000+ square feet.
“We are excited by the response we have received in just three months since the launch of our fractional investment platform last year. This INR 100 Cr+ AUM milestone is testament to the unbridled faith reposed by investors on our platform and will play a significant role in establishing ourselves as a trusted investment partner for both clients and developers. Our prime focus is to help investors earn lucrative returns through rental income and capital appreciation of the property. We plan to reach AUM of INR 1000 Cr within the next six months by building a gamut of assets across tier 1 cities, while focusing on properties that offer better periodic yields and exit returns,” said Tanuj Shori, Founder and CEO, Square Yards.
The Hyderabad commercial property will provide investors with 8% gross returns on their investment and a targeted XIRR of 14-15%, post fees and pre-tax. Amid the digital transformation of the commercial real estate sector, investing in commercial assets through fractional ownership is slowly becoming the next big thing for people looking to build stable wealth. It has opened the commercial real estate market for middle-class investors who want to enjoy high-yielding assets alongside HNIs.
“The fractional ownership market in India is at a very nascent stage and have 4-5 players collectively today, having approx. INR 1200Cr asset under management (AUM). Presently most players are only investing in commercial yielding asset. We see this market growing at 10x within 3 years with an average return of 14-15% XIRR (post fees, pre-tax) and would also start fractional offering in industrial assets, schools, student housing, hospitals, land etc. beyond just commercial assets,” said Anand Moorthy, CBO, Asset Management Services and Data Intelligence, Square Yards.
With the help of real estate tech platforms like PropsAMC, it has become easier for investors to identify, buy, track and scale fractional property investments without any fuss. Furthermore, investing in CRE via fractional ownership meets all criteria of returns, has the safety of capital preservation, and can generate steady monthly or quarterly cash flows.
The fractional ownership market in India is pegged to become a big investment vehicle in the coming years, with the market now valued at $5 billion and expanding. Demand for CRE and office leasing has grown significantly in the past couple of years in India as MNCs are dropping anchor in tier 1 cities to become a part of India’s growth story. With the CRE market estimated to grow by 16%, fractional investing will play a stellar role in substantial infusion of capital in several upcoming commercial projects and in the same breath earn handsome returns for investors.