Fractional ownership is unlocking new opportunities for investors in real estate

financialexpress.com:

With the real estate sector spreading its roots across key markets driven by rising demand and strong sales, investors are now more actively looking for avenues to get big slices of the growth pie. Over the years the real estate sector has become more mature due to the introduction of regulations, and this has begun to garner positive interest from investors. What truly democratized the sector is the introduction of investment concepts like Fractional Ownership which allows individual or retail investors to invest in high-value properties and earn fixed returns from rent-generating assets.

While alternate investment options like AIF and REITs are becoming popular in India as lucrative and effective investment vehicles, these are more focused on institutional and high-net-worth investors. On the other hand, investment models like Fractional Ownership are targeted towards retail investors who can get access to the high-value commercial segment through this model. The good news is that this kind of model is not only creating more avenues for retail investors but also opportunities for developers to explore varied funding sources.

According to Knight Frank, a leading real estate consultant, the market size of fractional ownership in India was USD 5.4 billion in 2020 and is projected to reach USD 8.9 billion by 2025, growing at a CAGR of 10.5%. This is a clear marker of fractional ownership’s sharp growth trajectory as a viable investment avenue.

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Fractional Ownership started to become more popular amongst investors when SEBI proposed various Fractional Ownership Platforms (FOPs) to register with SEBI MSM REITs and made it mandatory to comply with