With Rs 150 crore worth of assets under management (AUM) currently, it aims to bring in 40 new Grade A properties to achieve AUM of Rs 1000 crores within a year
hBits, a commercial real estate company offering fractional ownership (FA) to investors in Grade A properties, raised Rs 20 crore in a funding from angel investors. These included Nirmal Jain, chairman and founder of IIFL, Jayesh Parekh, former managing partner of Jungle Ventures and Awdhesh Krishna, ex-managing director of Snow Leopard (Kirloskar Family Office). Others who invested in the company are Incred Capital.
hBits will utilise the funds to scale up by acquiring assets under management, customer acquisition and expansion of the business to newer cities. It currently uses machine learning to gather historical sale and rental data, which is available on its platform for everybody to access. It will further strengthen this technology to increase transparency to information sharing and to increase the ease and security of transactions.
The company has Rs 150 crore worth of assets under management (AUM) from its eight properties. It aims to bring in 40 new Grade A properties and achieve AUM of Rs 1000 crores within a year.
hBits will establish its presence in the top six cities by the end of 2023 in India. it presently has 30,000 investors on its platform, with most working in multinational companies at managerial level positions.
Talking about the growth, Shiv Parekh, founder of hBits said, "Fractional ownership is gaining momentum with new players joining the band. Investors are taking up opportunities in a day for Grade A assets. With RBI raising rates and all other forms of investments losing sheen, fractional ownership can further impetus to investing in real estate assets.”
He added that the returns are encouraging, considering inflation rates increasing at around 7 per cent. Moreover, with volatile stock markets offer returns of around 8 to 10 per cent, it is a win-win situation for the investors. "We believe that investors in Fractional Ownership in Grade A assets will outnumber the number of properties available for investments," he added.
hBits is planning to use blockchain technology to make all the transactions paperless. All the contracts are digitally signed, and investors can buy and sell transactions themselves through its platform, thereby cutting the need for intermediaries.
Samir Bhandari, CFO at hBits added, "The concept of fractional ownership is a perfect entry point for new investors, as it offers a secure investment option with long-term income and confirmed monthly cash flow in an otherwise high-risk market. Tech-led platforms like us are making the entire process of investment and ownership simpler than ever before.”
He added that the company takes care of several critical aspects of investing right from discovery until the liquidation of properties. It helps investors with preliminary processes such as due diligence, procurement of the title document of the asset, and overall asset and peer group comparison; fractional ownership platforms attract investors interested in building future income.
Presently, hBits has almost 1.50 lakh square feet of AUM in 8 assets that the company manages in Mumbai. All the assets have Grade A tenants like IIFL, ATPI, ICICI Bank, Ingenico Group, Smartworks and Viaante Business Solutions.
Established in 2019 with offices in Mumbai and Delhi, hBits has already exited its first asset, a prime office space, with a return of more than 17.54 per cent internal rate of return (IRR). It closed one of its assets in 17 days.