The BHIVE Group, which has interests in commercial real estate and fintech says demand for fractional ownership has seen huge response from investors and plans to buy 4 lakh sqft of office space over the next one year in Bengaluru.
The firm that launched in latest office asset in Koramangala has seen it already subscribed by 50% percentage.
Shesh Rao Paplikar, Chief Executive Officer and Co-Founder BHIVE Group said, “Over the past decade, there has been a tectonic shift in the investment pattern in the Indian real estate with investors looking for greater flexibility in investments with limited or minimal management hassles. This has made fractional real estate ownership quite popular and is the future of investing.”
Be further said, “Buying 2nd and 3rd residential apartments for investments is no longer popular since rental yields have dropped to 2-3% across major cities. Yield from commercial real estate is not just slightly more, it is many times more than Residential Real Estate. This is the real reason savvy investors are moving to commercial real estate.”
Fractional ownership enables investors to own a share in premium commercial real estate in Bengaluru and earn attractive returns. With a minimum investment ticket size of Rs 10 lakhs, investors can earn a gross rental yield of nearly 10.27% annually with monthly pay-outs and total return of 15.18% per annum including property appreciation.
Through this investment tool, investors will be able to own a share in a Grade-A office space in Koramangala, Bengaluru which is a popular start-up destination. Spread across 9,600 square feet with G+4 Floors, this pre-leased property has a built up area of 22,385 square feet.
“Investors can also exit and reap the benefits of capital appreciation estimated nearly 5-10% per annum,” he said.
Fractional ownership is fast emerging as a popular means of investment for the retail investors in India which allows them to own a part of the property – commercial, warehousing or industrial parks.
This mode of investment is gaining prominence as it offers an opportunity to invest with a minimal ticket size, stay invested for long-term into a stable asset class offering high returns, a convenient way of investment with no hassles of managing the asset and the ease of exiting the investment.
BHIVE’s foray into fractional real estate ownership through its fintech arm BHIVE Alts assumes significance as the Indian real estate industry is undergoing transformational change and the company has been at the forefront of developing premium managed office spaces for customers and investors. The company, through this offering, aims to democratise real estate investment and give power into the hands of the investors to seamlessly invest across different real estate segments through its technological platform.
The BHIVE Group is one of the fastest growing commercial real estate (CRE) focused startups in the country with group companies BHIVE Workspace and BHIVE Alts offering co-working spaces and fintech solutions backed by the likes of Blume Ventures & Nikhil Kamath of Zerodha.
Started in November 2014, BHIVE Workspace has become the largest co-working space provider in Bengaluru, with 172 start-ups and companies operating from its four locations in the city in less than two years. Currently, BHIVE operates in Bangalore and plans to be in 6 major cities of India by June 2017.