Fractional ownership, a concept where the ownership of an underlying asset is divided among multiple investors thereby lowering capital requirements and facilitating larger participation. Each investor owns a fraction (or a small percentage) of the underlying property. It enables investors to purchase property across regions and ticket sizes and benefit from rental yields and capital appreciation.
There has been the advent of several prop-tech start-ups such as
Assetmonk,
BRIKitt,
Fracsn,
Grip Invest,
Myre Capital,
Propertyshare,
RealX and
Strata in India.
These start-ups act as aggregators of properties and charge a fee for selling the asset to the investor. The technology required to onboard an asset after technical and financial due diligence as well as the ability to bring investors on the platform has become a key differentiator. Fractional ownership offers an easy way to buy commercial real estate like one would a financial asset, significantly
expands investor reach and reduces compliance burdens.
