Introduction
The Indian fractional ownership market is currently Assessing at USD 500 million. It is exceptions to grow 10 times in the next 5 years. Although the industry is facing regulatory compliance issues in the early stages of the implementation of MSM REIT regulations, these are expected to pave the way for market growth. The Indian fractional ownership market is expected to cross $5.0 billion in assets under management (AUM) by 2030.
Table of Contents
- Investments in Commercial Real Estate
- Properties in Top Seven Cities in India
- Fostering Growth with Regulatory Oversight
The reports highlight the enormous growth potential of India’s real estate fractional ownership market. This analysis looks at Grade-A office properties in India’s top seven (Mumbai, Delhi NCR, Kolkata, Chennai, Bangalore, Pune, and Hyderabad) markets. Throws light on the market’s potential size and expected growth trajectory.
Investments in Commercial Real Estate
Real estate investment requires a significant amount of capital. Due to high capital requirements and a lack of liquidity, investing in commercial real estate. In particular, it is limited to institutional investors or individuals with significant financial resources, the Indian ownership report said.
However, the emergence of REITs and fractional ownership platforms (FOPs) has changed the real estate investment landscape. These innovative platforms are democratizing real estate for retail investors and providing opportunities for investors to diversify their investment portfolios by accessing previously exclusive asset classes, the report said.
Properties in Top Seven Cities in India
The current fractional ownership market is Assessing at USD 500 million based on the value of assets under management. However, our analysis reveals significant opportunities for growth. MSM REIT owns 328 million square feet of Grade A office properties across the top seven cities in India. Its value is 48 billion dollars. It illuminates the promise and potential of the growing future of this sector.
The REIT market in India has grown from INR 0.3 trillion to INR 1.3 trillion in gross asset value (GAV) in five years. With the regulatory framework and FOPs overcoming the initial implementation hurdles, we expect the MSME REIT market to witness even faster growth, said Samanthak Das, Chief Economist and Head of REIS, India, JLL.
Fostering Growth with Regulatory Oversight
To accommodate the new fractional ownership space, the Securities and Exchange Board of India (SEBI) has mandated small and medium real estate investment trusts (SM REITs). As per the REIT Regulations 2014, the amendments constitute SM REITs. Addresses issues related to regulatory oversight in FOPs.
Before the SM REITs regulations, regulatory oversight of FOPs was largely unclear or absent. With increasing investor interest, a lack of uniformity in disclosure standards, and a lack of transparency in valuation, we are concerned about management fees, management costs, and investor settlements.
Registration of all FOPs with SEBI is required as per REIT norms and notified norms. With all schemes listed on stock exchanges, open market transactions lead to more transparency, better investor protection, and easier exits for investors. Truly democratizing the investment drama in Indian real estate.
Conclusion
Shared ownership, with its inherent advantages of affordability, diversification, and appreciation potential, is poised to become a major investment option in India. With the growth of fractional ownership platforms in India, it is essential to focus on educating investors and other stakeholders about this investment model. For more information, visit Openplot.
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