Property Share, a Bengaluru-based startup that enables its users to go for a unique, fractional property ownership model in a few rented properties, has announced that it has raised an undisclosed amount in a funding round. The funding round was led by Japanese asset management firm Asuka.
In the current round, the company’s existing investors Pravega Ventures and Singapore-based venture capital fund Beenext have also poured in money. The money will be mainly sped on technologically upgrading the product and recruitment across areas such as investment, operations and technology.
Kunal Moktan, co-founder of the company, said,
We have about 15 properties under management. We try to find properties that are likely to make 15-20% returns per year for investors in real estate.We have about $4 million in assets under management (AUM). Our current listing, which is a com mercial office property in Bengaluru, is a $4-million listing, which is going to double our AUM.
The company was founded by IIM-Ahmedabad alumni Hashim Khan and Kunal Moktan. The platform currently claims to be managing commercial and residential properties worth Rs 50 crore. The the end of this year, the startup is aiming to manage properties worth Rs 250 crore.
To generate revenues, Property Share charges a percentage of the rents as management fee, a performance fees linked to the return and capital appreciation of the property. A brokerage of one per cent is charged on the resale of an owner fraction. Apart from this, Property Share also manages properties outside their portfolio, for which rent of two months is taken as management fees.
Kunal Moktan believes that Japanese asset management firm like Asuka will bring in institutional capital, acting as an anchor in investments in the long term.
The minimum ticket size for investments in fractional property ownership on the platform is Rs 10 lakh. The company says that a large number of its customers are employees at mid-level positions in IT companies in the 30 to 50-year-old age group.
According to IBEF, the Indian real estate sector is said to be one of the most globally recognised sectors. By 2020, this market is expected to touch USD 180 billion.