The Indian fractional ownership market is expected to explode in the coming years, reaching a potential value of USD 5 billion by 2030. This significant growth is driven by the introduction of Small and Medium Enterprise (SME) Real Estate Investment Trusts (REITs) by SEBI, a regulatory body in India.
Currently valued at around USD 500 million, office assets dominate the Indian fractional ownership market. SEBI’s introduction of SME REITs aims to bring more structure and oversight to this growing market. These regulations require Fractional Ownership Platforms (FOPs) to register with SEBI and ensure transparency in areas like valuation, fees, and grievance redressal.
Fractional ownership allows individuals to invest in a portion of a high-value property, making real estate investment more accessible to a wider range of investors. FOPs act as facilitators, managing the process and offering pre-leased commercial properties like offices and warehouses at a fraction of the total cost. Investors benefit from rental income and potential property value appreciation.
The fractional ownership market is fueled by technological advancements and increasing interest in alternative investment options. Educating investors and stakeholders, improving digital infrastructure, and collaboration between FOPs, developers, and regulators are crucial for further growth. Proper regulations will ensure a secure environment, allowing more people to participate in the real estate market.
The growth of fractional ownership, along with SME REITs, is expected to transform the Indian real estate sector. This will benefit investors, asset owners, and the economy as a whole by creating a more organized and institutionalized market.