Square Yards, one of India’s leading proptech players, has ventured into the fractional ownership category for commercial assets, enabling investors to have fractional ownership of these assets with attractive returns. It has recently raised Rs. 112 crore from a pool of 250+ high-net-worth individuals for a commercial property in Hyderabad, covering 1 lakh square feet in office space. The average investment size is around Rs. 40 lakh. The company is offering this property for fractional ownership to investors.
The sum has been raised by the data intelligence and asset management division of Square Yards, PropsAMC for this first Grade-A commercial project in Hyderabad. Tanuj Shori, the Founder and CEO at Square Yards, feels that the AUM (asset under management) of more than Rs. 100 crore is a major landmark and one that testifies to the faith reposed by investors on the platform. He also adds that Square Yards is aiming for AUM to the tune of Rs. 1,000 crore in another six months through the creation of a portfolio of assets throughout Tier-1 Indian cities, while looking at properties that ensure superior exit returns and periodic yields.
Investors will get 8% in gross returns on this Hyderabad commercial property before taxes and after fees, in addition to XIRR (extended internal rate of returns) which is targeted at 14-15%. Square Yards is the facilitator that will be listing these commercial assets on its platform, while raising funds for property acquisition from HNIs accordingly. The system comprises acquisition through SPVs and proportional stakes being allotted to investors. Square Yards will also be the asset manager for these properties and investors, along with the SPV. The tenant will pay monthly rentals to the SPV and this will be proportionately distributed amongst all investors.
Anand Moorthy, the CBO, Asset Management Services and Data Intelligence, Square Yards, states that fractional ownership is in its early days in India, with investments of Rs. 1,200 crore in AUM (assets under management) by 4-5 market players currently. He also feels that the market could extend beyond commercial properties to schools, industrial assets, land, hospitals, and even student housing in the future.
Square Yards is a technology-enabled, global real estate aggregator and India’s largest player for primary residential real estate. It’s subsidiary Square Capital is one of the largest marketplace for secured mortgages in India. Square Yards platform offers an integrated consumer experience & covers the full real-estate journey from search, discovery to research, transactions, home loans and post-sales service – fully integrating buyers to an extensive network of 500+ partner real estate developers, and 90+ banks & NBFCs. Square Yards is led by accomplished professionals, ex-bankers, and Ivy school alumni and is backed by the competence of more than 2500 employees in 30 cities and ten countries.