Fractional real estate investment is transforming the way Indians invest in property.
It allows individuals to co-own high-value properties by pooling resources,
making real estate accessible to a larger group of investors without spending crores.
What is Fractional Real Estate Investment?
In fractional ownership, multiple investors collectively purchase a property,
usually through a Special Purpose Vehicle (SPV).
Each investor owns a fraction and receives returns proportional to their share
through rental income and
capital appreciation.
How It Works in India
- Select a SEBI-registered fractional ownership platform (e.g., Strata, WiseX).
- Choose from Grade A commercial or luxury residential properties.
- Investors typically contribute ₹7.5–25 lakh each.
- The platform manages tenants, leases, and property maintenance.
- Investors earn 6–12% rental yields and share in capital gains on sale.
- Exit via secondary marketplace or platform-arranged buyer.
Current Market & Growth
The fractional real estate market in India has grown rapidly in recent years:
- Market size expanded from ₹1,500 crore (2019) to ₹4,000 crore (2023).
- Projected to reach ₹30,000–35,000 crore by 2028 (~$5–8 billion AUM by 2030).
- Adoption driven by millennials, NRIs, and HNIs seeking passive income and diversification.
Regulatory Framework
The SEBI has introduced regulations under
Small & Medium REITs (SM REITs):
- Minimum net worth of ₹20 crore for investment managers.
- At least 95% of funds must be in rental-generating assets.
- Mandatory biannual property valuations and KYC/AML compliance.
- RERA registration applies for consumer protection.
Benefits
- Lower Entry Barrier: Start with ₹7.5–25 lakh instead of crores.
- Passive Income: 6–12% rental yield annually.
- Diversification: Spread investments across cities and property types.
- Professional Management: No operational burden on investors.
Risks & Challenges
- Liquidity: Secondary markets are still developing.
- Regulatory Gaps: Risk of fraud by unregistered platforms.
- Rental Volatility: Unoccupied properties reduce income.
- Co‑Owner Conflicts: Disagreements on management or exits.
Summary Table
| Aspect | Details |
|---|---|
| Minimum Investment | ₹7.5–25 lakh |
| Target Assets | Grade-A Commercial, Warehouses, Luxury Homes |
| Expected Returns | 6–12% annual rental + capital appreciation |
| Liquidity | Limited, secondary market evolving |
| Regulation | SEBI SM REITs & RERA compliance |
| Growth Outlook | ₹30,000+ crore AUM by 2028–30 |
Final Thoughts
Fractional real estate investing is democratizing access to premium assets
in India. With SEBI’s SM REIT framework and rising tech-driven platforms,
this market is set to expand rapidly. However, investors must perform
careful due diligence
before investing, considering liquidity, platform credibility, and regulatory compliance.
