RealX, a pune-based fintech start-up, has completed India’s “first fractional ownership” deal in real estate sector. The platform has bought a commercial property in Karad (Maharashtra) by pooling in investments from about 19 investors, RealX officials claimed.
“Each of the investors has been allocated equity (or ownership right) in the property, proportional to their investments,” said Manish Kumar, CEO of iVentures, one of the promoters of RealX.
RealX is an ecommerce platform which will allow property sellers and agents post their saleable property. Registered buyers, on the other side of the platform, could invest in these projects. The minimum investment threshold, currently, is Rs 5 lakh per investor.
“In due course, with more deals on the platform, there won’t be any investment threshold. Investors will be able to buy ‘fractional ownership’ in prime properties with small sums of money – even with a few thousand rupees,” Kumar explained.
A transaction is successful if it mobilise the desired price (set by the property seller). The transaction is executed in favour of the co-owners whose collective interest is represented by a custodian. After the sale deed is registered, the Regko – a group vertical – issues equitable fractional ownership digital certificates to investors (now co-owners of the property).
“High prices deter small-ticket savers from investing in real estate. This is more so in the case of commercial real estate,” said Yashwinder Singh, co-founder of RealX.