Fractional ownership of property in commercial real estate is being seen as a way through which the aspiring middle class and retail investors can grow their wealth. It is a new way to invest in commercial real estate
The financial troubles during the Covid-19 pandemic have forced people to look for new ways to grow wealth. Fractional ownership of property in commercial real estate is being seen as a way through which the aspiring middle class and retail investors can grow their wealth. It is a new way to invest in commercial real estate. This concept of fractional ownership in the real estate was prevalent in the US and Europe earlier and is now picking up in India. However, there are several concerns about fractional ownership of property. FE Online talked to Varun Mohan, Founder and CEO of Definite, to find answers to some of them. Excerpts:
Suppose a person is a fractional owner of a property and wants to sell his holding. What are the challenges he may face while trying to sell fraction ownership in the property?
Varun Mohan: The benefit of owning an asset through fractional ownership is removal of key hurdles, where earlier, to sell your asset you had to move around the city looking for a decent agent, dependable buyer who can complete the transaction, make you a right market offer and post that end-up paying them a huge amount in fees. But in fractional ownership it has taken away all such challenges, just to exit your asset you can simply do it, at a click of the button with options available on the platform, such as Definite Assist, where you get the offer in real time, the moment you put it up for offer, also you can exit the asset through private sale whenever you want and at the last every owner gets the exit via Final asset exit.
How and where to start fractional ownership of a property?
Varun Mohan: You can begin with accessing the fractional ownership platform, where you get to see a very clear technology and data-oriented transparent opportunity, with reports from reputed agency like JLL, Tier 1 Law firms and likewise.
Is it safe to invest for fractional ownership of property? How is it regulated in India?
Varun Mohan: Fractional Ownership is a new concept in India and is offered through Private placement which is already regulated, but we as a matter of practice have added all the best options available in the country such as for investor protection we are using Trusteeship services, having SEBI registered trustee for the said purpose, as in-house technology we have deployed our tech to be in compliance with strictest KYC, AML, FEMA norms which are authenticated using RBI approved technology and method. We have made this extra effort in advance to create an ecosystem where there is already in place a transparent, trustworthy and credible structure to give the best user experience.