Fractional ownership and how it is boosting liquidity in commercial real estate

livemint.com:

Real estate has long been a cornerstone of wealth accumulation for high-net-worth individuals (HNIs) and institutional investors. Historically, these groups had the capital and resources to invest in entire properties, reaping substantial returns and providing steady income streams.

However, the advent of fractional ownership is transforming this landscape, making commercial real estate accessible to a broader spectrum of investors.

Fractional ownership provides real estate owners and developers with a source of stable finance while offering potential investors and stakeholders end-to-end investment management and execution. This enables them to redevelop trust in this asset class and reposition the Indian real estate market on a global platform.

For the emerging class of HNIs, and retail and affluent investors, fractional ownership is a paradigm shift. This model democratizes commercial real estate, allowing investors to own a fraction of high-value properties.

It democratizes commercial real estate (CRE) by empowering retail investors to participate in institutional-grade investment opportunities that were previously dominated majorly by HNIs and institutional investors due to the large investment minimums.

Notably, investors can achieve returns nearly threefold compared to residential properties, with the internal rate of return (IRR) ranging from 11% to 19%. Additionally, real estate is not a market-linked asset, meaning it can provide more stable and potentially higher returns compared to more volatile investments like stocks.

The post-covid era witnessed a proliferation of fractional ownership platforms. These platforms have been instrumental in bridging the gap between investors seeking lucrative real estate