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Sunday, July 21, 2024

SEBI’s Boost to Fractional Ownership in Real Estate

SEBI, in its recent board meeting, announced significant decisions, including measures related to fractional ownership, with a primary objective of safeguarding investor interests.

The move is a strategic effort to regulate the real estate fractional ownership segment, a development hailed by industry experts as a positive and necessary step.

Saurabh Vohara, Founder and CEO of ALYF, India’s first technology-enabled marketplace facilitating holiday home ownership through a smart ownership model, commended SEBI for its actions. Vohara sees this as a positive step towards improving transparency, investor security, liquidity, and providing seamless exit options within the fractional ownership space.

Vohara stated, “This move has the potential to create a dual positive impact by formalizing fractional ownership as an investment class. It can attract a segment of portfolios towards a larger market and contribute to the supply of hospitality assets to meet the growing demand in the travel and hospitality sectors.”

Shravan Gupta, Founder and CEO of YOURS, a platform specializing in fractional ownership of luxury second homes, emphasized that this regulatory move signifies the strengthening of the fractional ownership segment, reflecting increasing demand from investors.

Gupta highlighted the importance of SEBI’s guidelines in formalizing the sector, instilling investor confidence, and addressing the complexities of Special Purpose Vehicle (SPV) securities issuances. He believes that the regulation will particularly benefit retail investors unfamiliar with such structures, contributing to the growth and acceptance of this innovative form of property ownership, aligning with established practices in developed nations.

With this new framework, the fractional ownership industry is anticipated to undergo a significant transformation.

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