Fractional Ownership: An Emerging Trend in Indian Realty Sector

Introduction

Over the last few years, the real estate sector has boomed significantly and is constantly evolving with cutting-edge initiatives in residential, commercial, and retail projects. With a growing population and a lack of available space, real estate has proven to be a profitable investment in a country where there is an increasing need for land.

Also, after the pandemic sent everyone on a financial roller coaster, fractional ownership of commercial real estate has arisen as a potential idea for safe investments that would offer both daily income and long-term capital appreciation. For regular people wishing to make profitable investments, fractional ownership is a blessing due to its low risk and high return characteristics. Continue reading the blog to know more about it.

What is Fractional Ownership?

The term “Fractional Ownership” simply describes a scenario in which a group of like-minded individuals pool their resources to jointly own commercial real estate as fractional owners. With this asset acquisition strategy, millennials may take advantage of new opportunities for a fraction of the price previously needed, as this type of ownership leads to multiple divisions of the total cost.

Why is Fractional Ownership growing?

As the commercial real estate (CRE) market is predicted to rise by 13% to 16% over the next five years, fractional ownership of CRE is rapidly increasing in India. Some of the factors that could contribute to this anticipated boom include the fact that the nation anticipates an increased demand for office space in the coming years, an increase in the number of large institutional investors, and a significant inflow of foreign capital related to numerous commercial projects.

Another factor that can be taken into consideration is Grade A properties, which are involved in commercial real estate, and are frequently leased by large businesses like multinational corporations, banks, warehouses, factories, or information technology companies. Such organizations don’t typically quit the premises abruptly and put the property owner in a position, unlike residential tenants.

On the other hand, a rental lease for commercial premises is often three years or longer. As a result, renting property to such businesses has several advantages, including on-time rent payment and complete control over setting up the space to suit their needs. Additionally, because they utilize the property as an office, they spend all their time maintaining the organization of the space and are more likely to extend their lease than to try to open an office somewhere else. Hence, it can be deduced that numerous interested parties are searching for investments in fractional shares of commercial real estate because of seeing a monthly deposit in the bank account and the continual rise in the market value of a property.

Conclusion

With the advent of fractional ownership, the CRE market has become more accessible to the common person. A recent but promising concept in India, Fractional ownership, which enables numerous investors to band together, pool their funds, and purchase a CRE property, can be seen warmly welcomed in the country, proving that such trends are favorable since they indicate that market conditions are maturing and that there are more options for holding assets.

About Us

Since 2007, Subham Group has been a renowned real estate company in Guwahati offering a wide selection of premium homes. We are wholeheartedly committed to developing premium homes of different sizes, allowing people to invest in their dream abode. We ensure the use of high-quality materials for the development so that the residents do not fall into any inconvenience or quick damage during their stay.

To learn more and find your ideal home, contact us.